Infos Business of Saturday, 22 November 2014

Source: Ecofin Agency

Niger to halt oil transit through Cmr

The Republic of Niger could be considering halting its oil transit through Cameroon via the Chad-Cameroon pipeline. This pipeline conveyed crude oil produced in this country to the Kribi deep Sea port. This uncertainty on the part of Niger stems from, "growing insecurity at its borders and the permanent threat from Boko Haram sect in the Lake Chad region ".

The Nigerian authorities for instance are forced to look for an alternative, like the construction of an oil pipeline through Benin, "a country considered to be less exposed". This new option, we learnt has the advantage to integrate "into the vast West African rail loop project, though it could be very expensive.

Indeed, for the abandonment of the Chad-Cameroon option, the budget of the new route would require the pipe line to move from simple to double, since in addition to the pipeline in the Nigerian territory it will have to build in full another pipeline in Benin.

However, for the time being the Nigerian Government has not yet decided. But the folder is currently studied by those in charge of the oil and energy portfolio who signed a bilateral agreement on October 30, 2013 in Yaoundé.

This contract outlined the conditions for transit of Nigerian petroleum on Cameroonian soil, through the Chad-Cameroon pipeline.

If Niger finally abandons this first option, Cameroon will be deprived of substantial financial resources, the export of Nigerian oil via the Chad-Cameroon pipeline subject to the payment of transit to the Cameroonian Exchequer.

This right of transit was upgraded on 29th October 2013, from 195 francs Cfa ($0.41) per barrel, to 618 francs Cfa ($1.30) per barrel. Allowing Cameroonian public Treasury to make 6.5 billion Cfa francs during the first four months of the year 2014, equivalent to the sums generated by this same right of transit over a period of 11 months in 2013.