Cote d’Ivoire, Ghana scheme to become sub-region’s oil hub

The West African sub-region is witnessing new trends in oil and gas sector. While Nigeria remained the undisputed leader in all aspects of the oil and gas value chain in the sub-region, emerging trends in ‘frontier’ countries and discoveries from Ghana to Mauritania or Sierra Leone to Equatorial Guinea means that the region’s hydrocarbon and energy resources landscapes is fast changing.

Demand for petroleum products is booming in West Africa, especially for transport fuels diesel and gasoline due to a rising population. The majority of those fuels are currently imported due to limited refining capacity. But Nigeria, despite its huge hydrocarbon reserves, seems to be losing the initiative especially in terms of transforming its huge potential into making the country the major hub for West Africa.

As Nigeria continues to dither, other countries in the West African sub-region with far less hydrocarbon resources are taking up the initiative and showing the way forward.

Cote d’Ivore to invest nearly $1 billion

Cote d’Ivoire plans to invest about $1 billion in oil product pipelines and storage in a bid to create the largest fuel hub in sub-Saharan Africa, its energy ministry said recently.

“The mass storage company will be tasked with building 1.5 million cubic metres (nearly 1.2 million tonnes) of storage by 2020, making Cote D’Ivoire the “Rotterdam” (the giant storage hub in Europe) of Africa and the biggest oil product market in sub-Saharan Africa,” the statement said.

The storage company will invest $718.46 million and the transport company will invest $256.59 million. A dozen investors have shares in the two new companies, including French oil major Total and French industrial conglomerate Bollore, it said. It named other investors as: Vivo, Puma, Sahara, IPSL, Agility, Petro-Ivoire, Oil Libya, Sonabhy, Petroci and Mali.

Also, Cote d’Ivoire recently signed a contract with a consortium led by Total in order to build an floating storage and regasification unit (FSRU)-based LNG import terminal to cover the demand for electricity generation. The country currently exporting electricity to its neighbouring countries, however, a decline in domestic gas discoveries has put the gas supply for power generation at risk.

The consortium would design, build and operate FSRU that will have an initial capacity of 100 million cubic feet which would gradually be ramped up to 500 mcf. The ministry estimates the project cost at US$200 million, and the shipments to the terminal could begin by mid-2018.

Total of France would operate the project while other members of the consortium are Shell, Endeavour Energy based in Houston, Petroci, Cote d’Ivoire state-oil company, CI-Energies, Socar of Azerbaijan and Golar LNG.

Ghana to export petroleum products to Nigeria

Recent reports say Ghana is now exporting fuel and gas oil to Nigeria and will also export to Benin, Burkina Faso, Niger, and Mali. The exports will be shipped to countries in the region from Ghana’s Bolgatanga Petroleum Depot run by the state-owned Bulk Oil Storage and Transport (BOST) Co. Ltd.

Ghana’s Minister of Petroleum, Emmanuel Armah-Kofi Buah, said Ghana had been ushered into a new gas era that would guarantee its energy security for the next two decades “despite the global downturn in the oil industry.”

“Ghanaians have been empowered to be at the forefront of the industry and a liberalized petroleum downstream sector with strong private sector participation where product availability, competition, better customer service and lower prices are making Ghana the preferred destination for doing business in the sub-region,” said Buah.

The Bolgatanga Petroleum Depot, with a capacity of 6 million liters of refined gasoline and gas oil, was re-inaugurated in August 2015.

Nigeria’s oil sector weighed down by more than just militancy

Beyond the issues of militancy, low capacity utilization of the country’s four refineries, uncertainty resulting from non-passage of the Petroleum Industry Bill (PIB), the recent revelation of alleged oil theft by the international oil companies has added another dimension to issues that has weighed down Nigeria’s oil and gas industry.

Nigeria is suing several international oil companies for alleged theft of as much as $17 billion worth of crude oil at the minimum. The theft was alleged to have been perpetrated by either declaring less crude than was loaded on tankers leaving Nigeria or not declaring entire cargoes at all.

The alleged amount represents the shortfall of the money paid by the multinational oil firm in the account of the Nigerian government with Central Bank of Nigeria (CBN), for crude oil lifted in 2013 and 2014.

The federal government’s legal team led by Professor Fabian Ajogwu, armed with sworn affidavits of three US-based professionals, accused Shell Petroleum Development Company (SPDC) and its surrogate Shell Western Supply & Trading Limited of not declaring or under-declaring crude oil shipments during the period, following a forensic analysis of bills of lading and shipping documents.

The experts, according to reports, were able to track the global movements of the country’s hydrocarbons, including crude oil and gas, with the main purpose of identifying the companies engaged in the practices that led to missing revenues from crude oil and gas export sales to different parts of the world.

FRANK UZUEGBUNAM