West Africa Oil-Cargo Demand Gains on Hormuz Threat, Arctic Says

Bloomberg reported on Monday that Oil shipments from West Africa are rising as buyers seek additional cargoes after Iran threatened to block the Strait of Hormuz, Arctic Securities ASA said.An increase in cargoes from West Africa has reduced the supply of available ships, boosting charter rates for very large crude carriers, Oslo-based analyst Erik Nikolai Stavseth wrote in an e-mailed report. Each VLCC can carry 2 million barrels of oil. The strait is a chokepoint for shipments of crude from the Persian Gulf.
“Some buyers are positioning for other cargoes from West Africa to compensate for any possible blockade of the Persian Gulf by Iran,” Stavseth said by phone from Oslo. “An increase in suezmax rates in West Africa results in fewer ships in the Persian Gulf, and this is net positive for VLCC rates in the gulf and West Africa.”
However West Africa and the Gulf of Guinea are not without problems. Some of the Energy rich countries have either been faced with civil wars (Sierra Leone, Liberia, Senegal/Cassamance) or low level armed obstructionist in the case of Nigeria. Very weak state institutions undermined by corruption in high places and the rise of drug trafficking pose a challenge to business and investment.
Reuters Fact Box reported that Gulf of Guinea nations produce more than 3 million barrels of oil per day – about 4 percent of the global total – mostly for European and American markets, the bulk coming from OPEC member Nigeria (2.2 million bpd).
Smaller producers are Equatorial Guinea (200,000 bpd), Congo Republic (340,000 bpd), Gabon (230,000 bpd), Ghana (80,000 bpd), Cameroon (55,000 bpd) and Ivory Coast (40,000 bpd).Ghana Jubilee fields began producing oil in December 2010. It expects to raise output to 120,000 bpd by early next year and 250,000 bpd after three years. Sierra Leone recently announced Bid Round for 9 offshore blocks. About 5,800 line km of reprocessed 2D seismic and 3,200sq km of 3D data are available for purchase at TGS-NOPEC offices in Houston Texas, Bradford UK and Oslo.