Niger has resumed oil exports after it reached an agreement with neighboring Benin following a recent border dispute. Niger stopped crude shipments in June after the West African nation closed a pipeline operated by China National Petroleum Corp. that links the Agadem oil field to the Sèmè Kpodji terminal in Benin.
"We've reached an agreement. Loading of crude started this morning," Benin Energy Minister Samou Adambi told reporters on Monday, with Prime Minister Ali Lamine Zeine's office confirming the resumption of shipments.
Niger relies on the 1,950 km-long Niger-Benin Export Pipeline, built by CNPC as part of a $4.6 billion in the country's petroleum industry, to repay a $400 million oil-for-cash loan from the Chinese company. Niger plans to use revenue generated by oil shipments to repay the loan. The landmark 110,000 b/d Niger-Benin pipeline will increase Niger's crude production five-fold and make the country a significant exporter. Prior to the construction of the pipeline, landlocked Niger produced just 20,000 b/d of crude from its Agadem Rift Basin, which it primarily used domestically due to a lack of an export route. Savannah Energy Plc (OTCPK:SVNNF), the only Western company operating in Niger, plans to bring a 1,500 b/d oil project onstream before ramping up to 5,000 b/d.
CNPC was on the verge of overhauling Niger's oil sector when President Mohamed Bazoum was overthrown by his presidential guard in 2023, triggering a raft of sanctions by regional economic body ECOWAS as well as condemnation from Western governments. Military ruler Abdourahamane Tchiani replaced Bazoum as the country's leader. Niger was a longstanding Western ally under Bazoum and was considered a bulwark against the spread of extremism across the Sahel, including emerging oil producers like Cote d'Ivoire and Ghana. In contrast, Tchiani is decidedly anti-western and quickly cut ties with former colonial power France in favor of Russia.
Over the past decade, China has increasingly abandoned its so-called "Angola model" wherein it provided oil-backed loans to African countries to finance the building of roads, hydroelectric dams, railways, etc. China has, instead, been turning to Gulf countries and Russia with more reliable production infrastructure.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com
- Fatal Explosion Rocks Louisiana Natural Gas Pipeline
- Colombia Bans Coal Exports to Israel
- Russia Reiterates Claims of U.S. Involvement in Nord Stream Explosions
In the Gulf region China brokered a rapprochement between Saudi Arabia and Iran thus enabling them to resume diplomatic relations and also reducing tension in the whole Gulf region.
China did it again in Niger in Africa helping sort out a border dispute between Niger and Benin thus helping reopen the Niger-Benin pipeline, operated by China National Petroleum Corp (CNPC) and enabling Niger to resume its oil exports.
Niger relies on the 1,950 km-long Niger-Benin Export Pipeline, built by CNPC as part of a $4.6 billion in the country's petroleum industry, to repay a $400 million oil-for-cash loan from the Chinese company. The Niger-Benin pipeline will increase Niger's crude production five-fold to an estimated 550 million barrels a day (mbd) from its oilfield in the Agadem Rif Basin and make the country a significant exporter.
Niger was a longstanding Western ally until a decidedly anti-Western military coup d'etat took over and quickly cut ties with former colonial power France in favour of Russia.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert