The discovery of oil in commercial quantities by Niger and Chad, two landlocked African countries in the Lake Chad basin, has renewed the interest of other countries, particularly Nigeria, in the basin and other inland basins. This is a positive development that could lead to increased global production.

According to the 2012 BP Statistical Energy Survey, Chad has proven oil reserves of 1.5 Bbbl. Other studies establish the prospect of more reserves, and Chad has become one of sub-Saharan Africa’s significant crude oil producers.

Chad’s oil is largely from a number of fields in the Lake Chad basin and in the Doba basin in southern Chad near its border with the Central African Republic. The Doba basin’s oil fields are estimated to contain reserves of about 1 Bbbl of crude oil.

The China National Petroleum Corporation (CNPC), Sonatrach, and Petronas are some of the foreign companies prospecting for oil in different parts of Chad. A consortium led by ExxonMobil is in charge of developing the Doba basin. Development also is going on in the Bolobo field as both the Kome and Maiandoun fields are fully operational.

ERHC Energy Inc. reported that following several months of negotiations, the government of Chad formally awarded it three oil blocks – Block BDS 2008, Manga, and Chari-Quest Block 3 – in the country for exploration and development. ERHC said production sharing contracts have been signed with the Chadian government.

Chad has revised its code for oil production to allow for production sharing agreements between foreign companies and the Chadian government rather than requiring foreign investors to bear all exploration costs.

However, for successful oil production in Chad, which has no direct access to the ocean, moving large quantities of crude oil from its territory to the world markets depends largely on the cooperation and support of neighboring Cameroon.

Chad negotiated the construction of a pipeline with Cameroon to export its oil. The 1,070-km (665-mile) underground pipeline runs from the Doba basin through southern Chad to the Cameroon border to carry Chadian crude oil across Cameroon until it reaches the port of Kribi for export. The pipeline’s capacity is estimated at 225,000 b/d.

CNPC’s first production well in Chad came onstream in April 2011. By August of the same year, the new Djarmaya 20,000 b/d refinery became operational near Chad’s capital of N’djamena, which is 40% owned by the Chadian government and 60% by CNPC International. For the first time in its history, Chad was able to produce its own gasoline and diesel.

Oil Find In Niger Republic

Efforts to find oil in Niger Republic began in the 1950s, but its hydrocarbon fortune changed in 2008 when CNPC signed a production sharing agreement with the Niger government to prospect for oil in the country’s Agadem area in the Diffa region north of Lake Chad, with a promise to build the Agadem oil field, a pipeline, and a refinery.

Various engineering contracts were concluded, but construction and prospecting work ended abruptly Feb. 8, 2010, following a military coup. In August 2010 the transitional government in Niger granted CNPC its long-awaited exploitation license.

In September 2011 CNPC began pumping oil from the Agadem block, 1,600 km (994 miles) east of Niamey, the Niger capital. The contract for oil prospecting signed by then-President Mamadou Tandja in 2008, two years before he was deposed in the military coup, awarded 40% of production to the Niger government and 60% to CNPC.

Oil from Agadem is transported through a 426.5-km (265-mile) pipeline to the 20,000 b/d Soraz refinery in Zinder. About 60% of the oil refined at the refinery is sold on the local market while the remainder is exported. The refinery, which produced the country’s first barrel of refined oil Nov. 28, 2011, was built to also produce LPG and gas-oil.

Niger President Mahamadou Issoufou announced last August that Niger has discovered additional oil in its eastern Agadem oil fields while oil prospecting in the northern Bilma block had showed positive prospects.

Reserves at Agadem oil field have been estimated at 650 MMbbl, and Niger is expected to begin operating reserves on four fields at its Agadem block by 2014, increasing the country’s production to 80,000 b/d.

Government officials say Niger will send around 60,000 b/d via the Chad-Cameroun pipeline, allowing the country to export its crude onto the international market from the port of Kribi in the Gulf of Guinea. The government last year said it expected its petroleum sector to provide Niger with US $164 million in revenue, eliminating costly fuel imports.

Oil production has brought job opportunities to Chad and Niger as well as training for their nationals in oil E&P, transportation, and marketing. Nationals of both countries who had worked in Nigeria’s oil industry have returned home to work.

Experts add that oil production offers Chad and Niger opportunities to help improve the quality of life of their citizens and bring immense changes to both countries’ economies. The refineries in Chad and Niger have provided fuel to their citizens at lower costs and brought revenues for both countries.

Issoufou has promised compliance with the Extractive Industries Transparency Initiative and backed a constitutional clause in Niger for proper management of natural resources revenues. “Niger has a bright future when it comes to oil,” President Issoufou said.

Obafemi Oredein, Special to E&P