T. Rousselin - MinesParisTech - GEO212 - France

To understand the actual situation and do some prospective work for the near future, it is necessary to understand the basic facts about oil projects in neighbouring countries. In this page we will focus on :

Top 1 - Nigeria

Nigeria is the giant of West Africa:

  1. Almost 160 millions inhabitants make it the most populated country.
  2. The country is at the same time very poor (Lagos hosts two of the largest slums in the world) and developed (universities ; research... and even a few satellites).
  3. With 2 525 thousands of barrels of crude oil (2011 data) and 1024 billions of cubic feets of gas (2010 data), Nigeria ranks 12th (3,5% of the world production) and 28rd in the world. Proven gas reserves rank Nigeria n°9th in the world.

Nigeriasat-vign

Nigeriasat-1 image taken on December 6th, 2008 over Niger, Benin and Nigeria (© DMCII)

But the country is faced with many problems:

  1. A federal country where southerners (where all the oil fields are) do not feel treated on an equal basis (this led to the Biafra war in the 60's).
  2. Non solved poverty, pollution and vandalism problems have led to more violent  behaviors (including oil smuggling and abduction of foreign oil workers).
  3. A growing insecurity in the north and north east with Boko Haram and Ansaru rebellions and a piracy problem offshore in the Gulf of Guinea.

Hence, for the central african issues, Nigeria could be:

  1. A market : The Nigerian refinery capacity at 445 000 BBD is almost equal to what it was 25 years ago (while population and economy have experienced an incredible growth. Hence, northern cities like Maiduguri (a city of more than 1 M people located in the north east of Nigeria) could be a market for Niger or Chadian petroleum products refined in Djermaya and Zinder.
  2. An economic player: Nigerian companies start to compete with western and asian companies for market and take oil licences in Chad and Niger.
  3. A stabilization force: Nigeria might play on central Africa affairs the same role as South Africa for its neighbours.
  4. An export solution if the Trans Saharian Gas Pipeline (TSGP) driving gas from Nigeria to Algeria is reallly built.

 

graph_oil_supply_b-up

Top 2 - Niger

Niger is a very poor country whose only important resource so far is Uranium and Gold. Niger suffered a coup in February 2010 to oust President Tandja. The newly  elected administration tries to recover normal relationship with international institutions and lenders but the war in Mali and the Boko Haram rebellion in northern Nigeria create a difficult business environment..

Under President Tandja, a strong partnership had been initiated with China National Oil Development Company (CNODC) both to exploit the Agadem fields (in Eastern Niger, close to the chadian border) and to build a pipeline from Agadem to Zinder and a 20 000 barrels/day refinery in Zinder.

Production started in 2011 (6 700 BBD in 2011) and the refinery started to work in november 2011 but has faced a lot of conflicts on the pricing of the product and on the value of the investment (Eastern Niger is not a real market and the refined products face competition with very cheap smuggled gas coming from Nigeria).

 

zinder_inauguration
zinder_refinery

Pictures of the new Zinder Refinery

 

Even if nigerian authorities claim that production should be around 100 000 BBD by 2018, a lot of work has to be done, as Niger will have to export the products through Nigeria or Benin or Chad and Cameroon (national consumption is around 7 000 BBD and most of it in the western part of the country, very far from Zinder ans Agadem).

Top 3 - Cameroon

Cameroon is an oil producing country but most of its production comes from offshore activities in the Gulf of Guinea.

When the Chad-Cameroon project was discussed, there were speculations that the Logone - Birni field at the border between Chad and Northern Cameroon could be exploited and its production should transit through the pipeline. This would create oil revenues for Chad outside of simple transit fees from the pipeline. So far those ideas stayed still and Logone Birni is not developed.

In fact, Cameroon actual economic strategy is to develop its hydropower potential in order to attract industries in need of cheap electricity, like aluminium production. The Lom Pandar Dam project on Sanaga river is the main investment of this strategy ... and its completion required to move a little bit the COTCO pipeline which crosses the future lake.

Landsat Lom Pandar

Area of the future Lom Pandar Dam and reservoir (Landsat imagery ©USGS)

Politically, Cameroon faces many problems (North / South rivalry with different economic development levels ; an aging president in power since 1982 ; high level of corruption...).

Recently, oil exploration has been conducted by a small chinese company in northern Cameroon near Lake Chad. A first drilling in 2011 has been successful. Eventual exploitation of these fields should be done through partnership with Chad or Nigeria.

Top 4 - Central African Republic

CAR is a country in turmoil: rebelllion in a large part of the territory, a largely corrupt government, the impact of neighboring countries conflicts (Congo, Uganda, Sudan and Chad), and one of the worst levels of AIDS in Central Africa.

The only oil potential lies near the northern border (it is the extension of the Bongor Trough and Salamat Basin in CAR territory). It was drilled in 1985 by Exxon (Aoukale-1). The Block H licence has been awarded to Grymberg in 2000. No field work has been done because of the war and the CAR govenment and the operator fought at court to settle their disputes.

Over the past two years, even if this settlement was not final, the CAR government discretly awarded a licence to CNPC and this company started exploration. But they had to stop in late 2012 because of the Seleka rebellion.

The O&G potential of northern CAR is linked with the development of Doseo Salamat Basin oil fields in southern Chad.

Top 5 - Uganda

The existence of oil in the Rift Valley area of Lake Albert has been known for a long time, but important exploration work has occured only recently. Tullow Oil had great successes in the past 5 years with multiple discoveries. Of course in Western Uganda, the main question is the export of that oil (Indian Ocean Coast beeing at 1 200 km). That is why since 2009, Tullow Oil has searched for partners for the exploitation phase. In february 2011, Total and CNOOC have joined Tullow to exploit Lake Albert Oil. Export should be done through a pipeline crossing Uganda and Kenya or Uganda and Tanzania.

 

Tullow Oil Maps of Uganda Block 1 and 2 discoveries (© Tullow Oil)

The question is also complex because the violence in North Uganda and neighbouring countries linked to the Lord's Resistance Army rebel group is still not settled and because Lake Albert shores are a natural reserve spot with large  environmental and touristic potential.

Top 6 - Kenya

Kenya is not an oil producing country so far and upstream activity is fairly modest. Chinese interests are represented by CNOOC (actually holding 2 licences). Western interests are mainly handled by junior companies.

But Kenya is one of the most services oriented countries in East Africa and with the port of Mombassa and its refinery holds a central spot in the discussions on the future export of Ugandan and South Sudanese oil.

Mombassa Oil Berth and Storage facility
Mombassa Refinery

Mombassa Oil Terminal & Mombassa KPRL Refinery seen by GeoEye-1 on October 7, 2009
(© 2010 GeoEye / © 2010 Google)

 

FURTHER READINGS

In order to get a complete view of the diverse informations available, we provide here a short selection :

  1. Nigeria :
  2. Niger :
  3. Cameroon :
  4. Central African Republic :
  5. Uganda :
  6. Kenya :

Last Updated ( Saturday, 16 March 2013 )