For example, in 2008, the US bought 40% of West African exports, Poten & Partners said in a comment piece.
According to the IEA, Africa produces about 7.25 mill barrels per day, predominantly in West and North Africa. The largest producers are OPEC members Nigeria and Angola, with daily output of 1.66 mill barrels and 1.48 mill barrels per day, respectively.
Nigerian production has been volatile in recent years, due to frequent militant attacks on oil infrastructure since the presidential amnesty programme stopped in 2016, declining to 1.31 mill barrels in March, 2017 from about 1.9 mill barrels per day in early 2014.By December, 2018, production had recovered to about 1.66 mill barrels and it is expected to grow further this year.
The Egina offshore oil field, operated by French oil major Total, started production in January and is estimated to reach 200,000 barrels per day later this year. Oil production in Angola, the second largest producer in Africa, has declined gradually over the last two years from about 1.7 mill barrels to 1.5 mill barrels per day in December,2018 due to its ageing oil fields and the country has failed to attract new investment.
According to the Angolan government, production could fall to 1 mill barrels by 2023 without new capital. The government is taking steps to make the country more attractive for foreign investors. However, it is likely that production will continue to decline, at least initially.
West Africa also has several smaller producers, such as Gabon, Equatorial Guinea, Ghana and Congo. The IEA expects production in Gabon and Equatorial Guinea, a recent addition to OPEC, to continue to slide.
Gabon’s oil industry faces additional uncertainty because of a coup attempt last month. Production in Ghana and Congo is expected to increase, but the volumes of these smaller producers are too small to offset the developments in Nigeria and Angola.
As US production increased, more West African oil has moved to Asia. Shipment data indicated that in 2018 Asian destinations accounted for 54% of West African exports, compared to only 44% in 2014. As a result, VLCCs have increased their market share relative to Suezmaxes in West African exports.
While West Africa represents the majority of African production, changes in North Africa also have a significant impact on the tanker market. Algeria and Libya remain significant producers and exporters, each producing slightly more than 1 mill barrels per day.
Algerian output is more or less steady, but Libyan production and exports have started to come back from their collapse during the revolution that ousted long-term leader Gaddafi in 2011.
Libya’s production has doubled over the last two years, although occasional eruptions of fighting still affect production and export capacity.The largest oil field in Libya remains closed after local fighters captured it last December, reducing exports by about 0.3 mill barrels in January. Production is likely to remain volatile.
North African exports have increased significantly, due to the recovery of Libyan production and exports. About 40% of the total exports remain in the Mediterranean, which is down from over 50% as recently as 2016.
Asia has been a notable growth destination, especially China, which has bought increasing volumes from Libya. Some 90% of these cargoes are lifted on Suezmaxes. Exports to NW Europe have also increased, especially to the UK, offsetting reduced exports to Canada.
The majority of the crude oil from Africa is low sulfur (sweet) and this type of oil will become increasingly desirable in the coming years, as IMO 2020 will force the majority of the shipping industry to switch to low sulfur bunker fuels.
Growing markets in Asia will be the primary destinations for these volumes and we expect that VLCCs and Suezmaxes will benefit the most from any additional tonne/miles, Poten concluded.