February 2024, Vol. 251, No. 2
Editor's Notebook
Editor’s Notebook: Niger’s Bold Move as Exporter
By Michael Reed, Editor-in-Chief
(P&GJ) — Last month, Niger’s military chief, Abdourahamane Tiani, told an audience on state television that his fellow citizens could expect the west African nation to export its first barrels of crude within the next few weeks.
I know — it’s the kind of announcement many in the industry will greet with a great deal of skepticism, given the similar proclamations that have come out of Africa in recent years concerning oil and gas, pipeline projects and exportation. However, this time there seems to be a fair amount of validity behind the claim.
For one thing, the 1,243-mile (2,000-km) Niger-Benin pipeline was reportedly ready to go in November 2023, and its backer, Chinese Energy giant PetroChina, does not have a history of joking around when it comes to completing infrastructure. This would seem especially true since investment in the pipeline — including second-phase development of the Adadem field — is expected to cost about $4 billion.
There are, nonetheless, reasons still to doubt Tiani’s optimism; not the least of these being that he took control of Niger’s government by leading a military coup in July, not exactly a sign his government is especially stable at this point.
Still, for now, I’m willing to be optimistic about the exportation effort — and hopefully not in a Charlie Brown holding the football for Lucy kind of way either.
At any rate, via the pipeline, which connects Niger’s Agadem oilfield to the Benin port of Cotonou, Niger is expected to receive a little over a quarter of the 90,000 bdp that it hopes to export.
“Our goal is not simply to sell crude oil. We want to move toward a refinery that will process Nigerien crude within our own borders,” Tiani told his audience, emphasizing the country needs to gain greater benefits from its natural resources in the years ahead.
The success of such a move will, no doubt, mark the beginning of a significant chapter for Niger’s oil industry and give its shaky economy a much needed shot in the arm. This promise to initiate export capacity and generate modernized local refining capabilities, if realized, would greatly bolster the landlocked country’s ability to be a global trader.
At the moment, Niger operates a small oil refinery with a capacity of about 20,000 bpd, which is primarily used to supply domestic fuel demand. Obviously, the nation intends to refine larger amounts.
Speculation is that, ideally, Niger would like to boost output to 110,000 bpd with 80% or more of that total being exported through the pipeline. The project will include nine intermediate stations prior to ending at the Port of Seme, located on the Atlantic Coast in Benin.
“Our desire is not to market [the additional] crude oil,” Tiani told his audience. “We want to move toward a refinery, which will process Nigerien crude on Nigerien soil.”
Separately, during his annual report to parliament, Benin’s President Patrice Guillaume Athanase Talo said he would like to see his country’s relations with countries in which “coups have happened” quickly re-established, adding, according to Reuters, “the ball is in the court of the de facto rulers, who must show goodwill.”
It is a public position that bodes well for Niger’s efforts, as does the potential lifting of sanctions imposed on Niger by the ECOWAS, the West African regional bloc, which prompted the closing of the border by Benin.
The result of the sanctions saw Benin take a big economic hit as revenues from it ports declined. A reopening of the border would allow Niger’s crude oil to be sold internationally through Benin’s port of Seme.
So, with storage tanks in Cotonou most likely filled by the time you read this, that goal – despite the precarious circumstances that precluded it – seems more obtainable than at any other time.
Comments