Chad refinery venture with China suspends output

Chad’s first oil refinery, a joint venture with China National Petroleum Company (CNPC), has temporarily suspended production. It said that the price agreed with Chadian authorities to supply them was driving it into heavy losses. The launch of the 20,000 barrel-per-day (bpd) refinery in June was hailed as making the central African crude oil exporter energy independent, with production due to be ramped up to 60,000 bpd. But in a statement, the Societe de Raffinage de N’Djamena (SRN) said it had halted production from September 25 for a period of 40 days. The price of 200 CFA francs (US$0.41) per liter of refined product agreed with the state of Chad has resulted in losses totaling some US$4.7 million by the end of August, it said. Refined petroleum products are sold at about 500 CFA francs (US$1.02) per liter on average at the pumps. “The stipulated price is judged unreasonable, the refinery is suffering a heavy loss and is unable to continue operating normally,” the statement said. The €588-million (US$775.6 million) refinery is 60% owned by CNPC, with state firm SHT holding the remaining stake. (October 1, 2011)