May 26, (THEWILL)- While major international oil companies like TotalEnergy dump Nigeria for other parts of Africa, Niger has commenced shipment of oil. This development puts the landlocked African country into the league of oil-exporting African nations barely a year after a military coup.
S&P Global Commodities at Sea, a high frequency market intelligence service that provides visibility into commodity supply, reported that the Front Cascade, a Suezmax tanker with a capacity of 1 million barrels, was positioned just outside the Seme terminal.
Shipping data showed the 156,000-dwt Front Cascade (built in 2017) left the Benin port of Seme on Sunday.
The imminent loading marks the startup of the 110,000 barrels per day (bpd) crude pipeline, which will pave the for a massive increase in Niger’s oil production and make it a significant exporter.
Niger, an arid and landlocked nation, currently generates only 20,000 barrels of crude oil per day from its Agadem Rift Basin. This oil is mainly used within the country because there is no export route available. However, Niger is prepared to quickly increase production to utilise the new pipeline.
Sources indicated that the pipeline will initially operate at 90,000 barrels per day and will gradually increase to its full capacity.
The government of the West African nation of Benin agreed to temporarily lift its blockade of Niger’s oil exports from its Port of Cotonou. While it represents a major advancement for the landlocked country’s ambitions, it is also seen as a win for China as it looks to develop its interests in Africa.
China reportedly helped mediate the weeklong export impasse, with senior CNPC (China National Petroleum Corporation) executives alongside Chinese Foreign and Energy Ministries’ officials visiting Benin recently
The Chinese-funded 1,240-mile oil pipeline is set to transform Niger into a major oil exporter in West Africa. Niger has been producing a paltry 20,000 barrels per day from its oil-rich Agadem Rift Basin, most of which was used domestically due to lack of an appropriate export infrastructure. However, the state-owned CNPC offered a $400 million loan, which among other things saw the revamp of the pipeline to its current capacity of 110,000 b/d. The pipeline connects Agadem Basin to storage tanks and loading platforms at Benin’s Seme terminal.
This development is coming on the heels of international oil companies dumping Nigeria for other parts of the continent such as Angola, Equatorial Guinea and Democratic Republic of Congo.
Patrick Pouyanne, the chief executive officer of TotalEnergies, has said that the company is investing $6 billion in energy projects in Angola over Nigeria, citing inconsistency in policymaking in Nigeria as the primary reason for this decision.
During the Africa CEO panel in Kigali, Rwanda, Pouyanne said that despite the Niger Delta’s status as West Africa’s most productive region, the volatile policy landscape has rendered investments unsustainable, adding that the company has not conducted oil exploration in the region for 12 years.
During the Africa CEO panel in Kigali, Rwanda, Pouyanne said that despite the Niger Delta’s status as West Africa’s most productive region, the volatile policy landscape has rendered investments unsustainable, adding that the company has not conducted oil exploration in the region for 12 years.
He added: “Nigeria loves to open topics without closing them. You love to debate. There is always a new legislature in Nigeria about a new petroleum law. When you have such permanent debates, it’s difficult for investors looking for long-term structure to know what direction to go.
“In reality, the Niger Delta is the most prolific part of West Africa. But if you look at what happened, because of these debates, there has not been a single exploration in Nigeria for 12 years. It’s important to have a debate and then settle it and put a framework on the table that investors can trust.”
An oil and gas expert, Engr Bala Zaka said, “The international oil companies are running away from Nigeria because of business climate hostility. I will give you practical examples. When the government says they are looking for foreign investors you can know it is a lie.
“There is this company called Elf Petroleum, now Total Energy. They did not drill up to five wells in Nigeria for the whole of 2023. They have now signed a contract in East Africa to drill 450 wells in five years, meaning they will drill 90 wells every year. This is more than they ever drilled in Nigeria.
“Shell Development Company has sold off their landed assets in Nigeria. You remember, Shell built Port Harcourt. They have sold all those facilities in Port Harcourt and they are leaving. Shell is an institutional company that started oil and gas business in Nigeria They have sold their landed assets and their staff have been disengaged. And someone will say it is a good omen for Nigeria? ”
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
