EU sanctions aiming to squeeze Ivory Coast incumbent Laurent Gbagbo's access to funding could hurt the nation's 40,000-barrel-per-day oil sector and may shut down its 80,000 bpd refinery within months, according to the head of the state oil firm.
Petroci director Fadika Kassoum told Reuters it was not yet clear how its European trading partners would interpret an EU measure banning new transactions with it and 10 other Ivorian institutions, but said in an interview late on Thursday:
We must be realistic. We have to admit that two, three, six months down the line, these sanctions could have an impact ... It exposes us to what could be a slow disintegration.
Of Ivory Coast's cash-strapped SIR refinery -- in which Petroci has a minority stake and which supplies much of the region -- he warned the measures could deprive it of funds needed to buy in crude oil.
I think from March onwards, SIR is going to find itself in trouble and will have to stop its activities. We're not kidding ourselves, he warned.
Gbagbo has refused to step down, challenging UN-certified results showing Ouattara as the winner. His camp has brushed off the impact of sanction efforts and its cocoa sector -- the world's largest -- appears little touched so far.
On Saturday the EU added 11 Ivorian institutions to a list of officials targeted by a foreign assets and funding freeze, stipulating that they amounted to a ban on EU firms doing any new business with the bodies named.
Kassoum said he did not know yet how European partners such as Tullow Oil, Afren, and Edison would implement the measures, but said any hit to its cashflow would have serious knock-on effects.
We already have capacity problems paying salaries, meeting our obligations to pay suppliers, he acknowledged.
Diplomats and analysts estimate Gbagbo needs 70-80 billion CFA francs a month to pay salaries of soldiers and civil servants. Other administrative costs come to around 70 billion CFA.
The oil sector brings in around $1.3 billion, according to an estimate by the Royal Bank of Scotland. Total fiscal receipts in 2009 amounted to around $3.5 billion, according to the website of the Ivorian finance ministry.
As well as petrol, Petroci also oversees the gas sector that feeds Ivory Coast's electric turbines.
Ivory Coast has three oil wells in production, but a number of companies have exploration contracts to look for more and hopes are high after big finds in other nations along the coast of the Gulf of Guinea, such as Ghana and Sierra Leone.