BMI View: Cameroon is a small producer of oil and a nascent gas producer. Several small projects coming online should boost the hydrocarbons production over 2017-2018, but following that the production will decline until the end of the forecast. BMI believes that Cameroon could stand to benefit from lower oil prices as oil companies refocus investments towards more proven offshore plays. However, declining oil revenues could weigh on downstream developments as the government struggles to finance large-scale projects such as SONARA refinery development. Recent announcement that Perenco Cameroon is close to finalising a commercial deal with Golar LN G for construction of floating LNG facility can add upside to our gas production fore cast.
|e/f = BMI estimate/forecast. Source: EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||62.8||81.0||89.1||86.7||87.0||89.3||88.9|
|Dry natural gas production, bcm||0.2||0.3||0.4||0.4||0.9||1.1||1.1|
|Dry natural gas consumption, bcm||0.3||0.7||0.8||1.0||2.0||2.4||2.4|
|Refined products production & ethanol, 000b/d||42.1||43.4||43.4||43.4||58.6||59.8||60.4|
|Refined products consumption & ethanol, 000b/d||38.0||40.7||43.1||45.7||48.4||51.3||54.4|
Ongoing exploration provides much-needed upside risk to Cameroon's oil reserves. The country's offshore basins are the most prospective, with the Rio del Rey Basin to attract the most interest. However, Cameroon lacks access to the deepwater acreage where sub-salt prospects running from Sierra Leone to Angola have attracted interest from international oil companies and several smaller players.
Oil production came in at 81,000b/d in 2014, a 29.1% increase from 2013 production but remains shy of the projected 82,000b/d by Cameroon's national oil company SNH. This was the first sizeable increase since 2005 and was mostly attributable to ramp-ups of the Dissoni field and the Myia onshore field. We have only included limited production from the Logbada field and the first phase of the Etinde development within our gas production forecast. However, significant upside risk is likely past 2018/2019 from further phases of the Etinde development and/or from projects to monetise associated gas currently flared or reinjected. The size of GDF Suez's proposed LNG terminal highlights production potential of over 5bcm by the end of our forecast period.
An ongoing project at Cameroon's sole refinery will expand the country's refining capacity by a third to about 70,000b/d. In addition to boosting refined fuels production, it will allow for the processing of domestically produced heavier crudes, as opposed to relying almost entirely on lighter Nigeria crude imports. To the downside, it was reported that Cameroon's finance ministry seeks to raise USD1.5bn from banks to refinance the state refinery, which suggests that the government could be struggling with financing of this project.
UK-based Golar LNG has reached an agreement with Perenco Cameroon on the commercial terms and conditions for its floating LNG project in Cameroon. The deal is now subject to finalisation with SNH's approval. Under the terms of the agreement, Golar will provide the liquefaction facilities and services to SNH and Perenco as parties of the upstream joint venture. The allocated reserves are expected to produce at a rate of 1.2mn tonnes of LNG a year, representing about 50% of the vessel's nameplate production capacity over an eight-year period. Production is likely to start in Q217.