PetroChad exports first oil via Chad-Cameroon pipeline
In less than one month under new leadership, PetroChad Mangara has announced the export of its first barrel of oil via the Chad-Cameroon pipeline, ushering in a new era of production and revenue generation for Chad.
At a time when global demand for oil is on the rise, the export marks a significant step towards restarting and rebuilding production in Chad, as the company aims to position the country as a globally competitive oil producer.
What makes this development such a cause for celebration is that it demonstrates the commitment of both international oil companies and the country itself, while signaling a new era of production growth in Chad. Just last month, European independent oil and gas company Perenco completed the acquisition of Anglo-Swiss multinational Glencore’s corporate entities in Chad, providing the company with full ownership of PetroChad Mangara. With the acquisition, Perenco kicked off an ambitious production drive, with the company announcing its intention to restart production across key fields, bringing the country’s oil output back up to 16,000 barrels per day in the near term. Now, having announced its first export, this target is well on track, with a new era of industry growth awaiting the country.
Currently, PetroChad operates three major oil fields in Chad, namely, Mangara and Badila – both producing since 2014 and exporting oil via the Doba Oil Pipeline – and the undeveloped, yet high potential Krim oilfield. The announcement of first export via the Chad-Cameroon pipeline – a 1,070km-long pipeline linking the Doba oil fields in Chad with Cameroon’s Atlantic Coast pumping stations, ancillary facilities and infrastructure – marks the first step in the independent’s drive to resume production, while triggering associated exploration activities across the basin. The Krim oilfield itself represents a particularly attractive hydrocarbon hotspot, and with revenue generated from exports, exploration can kickstart and national output increase even further.
According to Perenco, the export of first oil would not have been possible without the close coordination with Société des Hydrocarbures du Tchad (SHT) and the Ministry of Petroleum and Energy, led by Minister Djerassem le Bemadjiel. Both the ministry and SHT have emphasized the role that oil and gas will play in Chad’s energy and economic future, and by working closely with international energy major, Perenco, the country is already seeing growth. For SHT and the ministry, the announcement reaffirms Chad’s readiness to welcome international explorers and investors into the country while for Perenco, it demonstrates the company’s capacity to deliver operational results in a remarkably short time.
“Production is getting back on track. I am bullish about what this project. I have always believed that when African nations stop throwing up roadblocks and start working to ensure that our oil and gas operators invest, our best economic opportunities comes to fruition. Chad as a country will reap the benefits of its huge reserves now that its leaders are taking this historic opportunity with Perenco and other operators and we encourage them to continue the dialogue and put the right policies in place. Under Minister Djerassem le Bemadjiel, Chad has created an environment worthy of foreign investment and following this announcement, new developments are set to follow,” states NJ Ayuk, Executive Chairman of the African Energy Chamber (AEC), adding that, “These kind of developments are what we at the AEC are excited to see in Africa. We have been saying for years that we need to develop our oil and gas resources to make energy poverty history and by getting production back on track, kickstarting exploration and utilizing intra-African pipeline networks such as the Chad-Cameroon pipeline, Africa will develop.”
At a time when the African energy sector is getting ready to convene in Cape Town for the continent’s premier event for the oil and gas industry, African Energy Week (AEW) – taking place from October 18-21, 2022 – the announcement of first export from PetroChad’s operations brings new hope for improving production in Africa. As it stands, declines in legacy fields across oil producing countries, inadequate investment in upstream activities and ongoing energy transition trends continue to hamper any real growth of the African upstream sector. However, as emerging producers such as Chad strengthen their sectors and exports begin to once again flow, a new era of development awaits the continent.