Libya Oil Expands to Retain 50 Percent of Aviation Market

Addis Fortune (Addis Ababa)

23 May 2011

Oil Libya is undergoing expansion in a bid to maintain the 50pc share of the aviation fuel market that Shell Ethiopia had before it sold its assets and downstream operations to Libya Oil Ethiopia in November 2008.

“We want to continue being the leading player in the industry all over Africa,” Bahru Temesgen, manager of external affairs at Libya Oil, told Fortune.

This year, Oil Libya is supplying 50pc of fuel to Ethiopian Airlines (ET) followed by Total Ethiopia with 35pc and NOC with 15pc, according to Bahru.

In addition, Oil Libya inaugurated the biggest Jet A1 tank with a capacity of 1.5 million litres on Tuesday, May 19, 2011, at its new depot on a 10,000sqm plot on the compound of Bole International Airport. The depot comprises five tanks with the combined capacity to hold 3.3 million litres of fuel and a 250,000-litre water tank for fighting fires.

The depot, the biggest of the 38 airport depots operated by Oil Libya across Africa, cost 15 million Br to construct on land leased by Shell Ethiopia in 1962. Shell Ethiopia, a United Kingdom (UK) based company that started operation in Ethiopia 1948, started supplying fuel to the aviation sector in 1962.

Libya Oil, which is owned by the Libyan government and registered in Mauritius, took over the land when it acquired the assets and downstream operations of Shell Ethiopia to enter the local market.

“The total market share increased since Oil Libya took over,” said Bahru. “Shell’s market share had been alarmingly reducing at the time of the sale, due to different reasons.”

Oil Libya’s total market share has increased from 24pc in 2008 to an average of 28pc, as measured between January and April 2011, according to data from the company.

In March 2011, Total Ethiopia had the biggest market share with 31.2pc, followed by National Oil Company (NOC) with 27.9pc, and Oil Libya with 23.8pc, according to an industry player.

“The new depot will lift the standards in the aviation industry,” Rafaal Mohammed, general manager of Oil Libya, told guests at the company’s Customers’ Day celebrations at the Hilton Addis on the same day as the inauguration.

A tender was floated by Oil Libya for the mechanical, civil, and construction works of the large tanker.

Local and international companies participated in the bids, including Civicon, Getas Engineering, and Pasqua Giuseppe. Mesfin Industrial Engineering was awarded the contract for the mechanical work, while MH Engineering and Desalegn Ababa General Contractor won the tenders for the design and construction work, respectively.

Oil Libya also deployed six state-of-the-art refuelling vehicles, each with the capacity to refill an aircraft, amounting to a total of 270,000 litres at a combined cost of around two million Birr. The company provides fuel services at six aviation depots. Aside from Addis Abeba, these include Dire Dawa, Jimma, Gonder, Jijiga, and Axum.

NOC, which was established in 2004, is the only indigenous Ethiopian company to engage in the supply of aviation fuel in Ethiopia. The only other locally owned fuel company operating on the market is Yetebaberut Beherawi Petroleum (YBP).

NOC constructed its first aviation fuel depot at a total cost of five million dollars with a capacity of 1.5 million litres, in July 2010. The company is expanding with the construction of a one million-litre tank.

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