Afreximbank Backs Atmin to Finance, Boost African Oil Trading

The bank has invested $3 billion in the trading house, which it expects to finance about $10 billion to $14 billion of Intra-African petroleum imports.

Atmin will be based in Dubai, the United Arab Emirates, and is expected to have around 15 employees.

It will start with crude and then expand into oil products and minerals, according to reports.

Afreximbank will be a controlling shareholder at Atmin, while employees will own some 15 per cent of the firm.

The move takes place as oil majors and Western banks retreat from Africa, and the continent is facing a decline in oil and gas production due to under-investment, while also spending $30 billion annually on fuel imports.

It is also seeking to address Africa’s persistent reliance on imported refined petroleum products, which accounted for an amount of $30billion annually in petroleum import costs due to inadequate refining.

Key products to be traded are refined petroleum products including but not limited to Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Heavy Fuel Oil (HFO), Jet Fuel, and Kerosene. The eligible exporters are refineries operating in Africa.

According to Reuters, Atmin will be run by Mr Ajay Oommen,a former Shell executive who worked for the oil major for for 17 years as well as Mr Vikram Thakur, who worked for 18 years at Shell, including in business development, trading origination and structured finance, as well as Mr Joseph Kanaan, a trader at Shell for 11 years.

Speaking on this, Mr Benedict Oramah, President and Chairman of the Board of Directors, Afreximbank, said that the development will have a direct impact on the volume of the refined petroleum products produced and consumed in Africa.

“It will also have a multiplier effect on the downstream petroleum value chain as it will catalyse critical investments in shipping and marine logistics for intra and extra African trade of crude oil and refined products.

“The multiplier effect will also be seen in marine cargo insurance and other ancillary businesses within the sector. We want to see an increased proportion of the about 4 mbpd of crude oil produced in the Gulf of Guinea refined in Africa,” he said.