Africa’s economic prospects according to the IMF

Cameroon: Oil Output

Today we turn our attention to Cameroon’s oil output, which is set to rise temporarily before resuming downward trend. The region is estimated to have attracted less than 2% of the Gulf of Guinea’s oil investments over the past decade.

Offshore and onshore oil exploration

Almost all exploration efforts have been offshore, but only in more recent years have selected companies expanded its search onshore and in the north. Oil analysts view Cameroon’s oil future to be at a certain degree of risk, with its Rio del Rey basin relatively mature. To provide context, most of Cameroon’s oil is located offshore in the Rio del Rey basin, while the remainder is found in the Douala Basin.

According to the US EIA, Cameroon had 200 million barrels
 of proven oil reserves in 2012, from a peak of 555 million barrels in 1986. Between 1989 and 2007, the country’s reserves remained stable at 400 million barrels, but since then have been on a declining trend. Furthermore, the country’s petroleum production has been declining gradually since 1986, mainly due to the depletion of mature oil fields.

Data from the US EIA indicates that Cameroon’s total oil supply declined by 5.1% to 61,990 bpd between 2010 and 2011 after a 15.4% decline in 2010. Despite the decline in production, the country’s fiscal and export revenues earned from oil sales have been boosted during the last few years by high oil prices.

A temporary increase

Cameroon’s oil output is expected to increase temporarily over the next few years as new wells start with production (following successful drilling results during the past few years) before resuming the downward trend (unless significant new oil wells are discovered). Production already increased considerably in 2012, climbing by 34% during the first half of the year to an average of 82,162 bpd, according to data on oil output from the EIA.

The government projected that crude oil output would reach up to 100,000 bpd by the beginning of this year. Cameroon’s state-owned oil company, Société Nationale des Hydrocarbures (SNH) expects oil production to increase by 20% during 2012-14.

Oil makes a contribution of some 6% to Cameroon’s GDP, 40% to exports, and accounts for around 40% of the Cameroonian government’s fiscal revenues.

For more on oil and gas in Africa, click here.
David Okwara

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