How Ethiopian Billionaire Mohammed al-Amoudi Caused the Biggest Bankruptcy in Morocco’s History

Rabat, Morocco – Before the shutdown of Morocco’s only oil refinery a decade ago, Ethiopian-born Saudi businessman Mohammed al-Amoudi had already raised concerns at the highest levels of the Moroccan government. His mismanagement and failure to fulfill financial commitments led to the largest bankruptcy in the country’s history.

In August 2015, tensions ran high within Rabat’s Royal Palace as then-Prime Minister Abdelilah Benkirane learned that the Société Anonyme Marocaine de l’Industrie du Raffinage (Samir) in Mohammedia had ceased operations. The refinery, with an annual refining capacity of 10 million tonnes and a storage capacity of 2 million tonnes, was a cornerstone of Morocco’s energy sector.

Despite assurances from Agriculture Minister Aziz Akhannouch, who stated that local distributors could meet demand without Samir, the shutdown had far-reaching consequences. Nearly 1,000 employees lost their jobs, and the refinery accumulated over $4 billion in debt owed to around 400 creditors, including key financial institutions such as Attijariwafa Bank, BCP, and Bank of Africa.

A Legacy of Broken Promises

Founded in 1959 and later nationalized in 1973, Samir symbolized Morocco’s energy sovereignty under King Hassan II. However, in 1997, the refinery was privatized and sold to Mohammed al-Amoudi, then one of the wealthiest men of African descent, through his Swedish holding company, Corral Petroleum Holdings AB.

Under al-Amoudi’s management, Samir’s financial health deteriorated. In 2014, the company reported a net loss of $337.7 million, followed by another $214.1 million loss in the first half of 2015. Despite repeated promises to inject capital and rescue the company, al-Amoudi defaulted on commitments, leading the refinery into liquidation.

Al-Amoudi had initially agreed to inject 6.7 billion dirhams ($998 million) to revive Samir but failed to follow through. Moroccan authorities, wary of his track record, took precautionary measures, such as account seizures and tax audits. In response, al-Amoudi accused the government of obstructing his investments and threatened legal action. In 2018, he escalated the issue to the International Centre for Settlement of Investment Disputes (ICSID), which ruled in his favor, ordering Morocco to pay him $150 million, a decision temporarily suspended in December 2023.

Privatization to Collapse

When al-Amoudi acquired Samir, he faced little opposition from Moroccan authorities due to his established presence in Saudi Arabia and Sweden. In the late 1990s, Morocco, grappling with economic challenges, saw privatization as a solution under an IMF-backed Structural Adjustment Programme.

Al-Amoudi acquired Samir for 4 billion dirhams and benefited from five years of protective customs duties and favorable pricing systems, yielding annual profits of 1 billion dirhams. However, his failure to reinvest in the refinery and reliance on debt financing ultimately doomed the operation.

In 2002, a fire at the Mohammedia refinery further exposed vulnerabilities, forcing Morocco to diversify its supply sources and opening the market to competition. Despite promises of a 12 billion dirham modernization plan, al-Amoudi’s leadership continued to fall short.

Failed Partnerships and Financial Mismanagement

Attempts to expand control within Morocco’s energy sector, including a failed partnership with local distributor Somepi, further illustrated al-Amoudi’s strategy of leveraging debt without substantial investment. Financial institutions, initially supportive, began losing confidence as Samir’s financial health deteriorated.

Efforts to modernize operations, such as the commissioning of a state-of-the-art hydrocracking unit in 2010, came too late. By 2015, the refinery’s financial burden proved insurmountable, leading to its closure and the largest corporate bankruptcy in Moroccan history.

The Aftermath

Today, the Samir refinery remains non-operational, and Morocco has had to adapt to a reliance on fuel imports. The scandal surrounding al-Amoudi’s management serves as a cautionary tale for the risks of privatization without adequate safeguards and oversight.

While legal battles continue, Morocco faces the challenge of balancing energy security with economic resilience, learning valuable lessons from the downfall of its once-prized industrial asset.