World Bunkering > News > Spring 2009 > Africa: exciting times for the bunker market

Since Cape Town hosted November’s IBIA Convention it was no surprise that Africa featured prominently in the programme. More precisely, bunkering in Southern Africa was the subject of a complete session. That was preceded however by a presentation that gave an overview of what is happening around this massive continent.

The speaker, Yaw Agyemang-Duah, was better placed than most to explain the problems and potential of Africa in general and West Africa in particular. With a BSc in Chemical Engineering and a master’s in Business Administration, not to mention a dozen or so other qualifications in the fields of oil and energy and business, he has just about the ideal CV for the managing director of an oil company, a post he has held for seven years or so.

In his speech he had been blunt about the challenges but optimistic that they could be overcome. He had told delegates: “A new crop of African leaders who want to develop their states along a democratic path have emerged.” He had stressed the “huge untapped potential in West Africa from the emerging oil nations like Ghana, Ivory Coast, Equatorial Guinea” and the “immense opportunities in Nigeria”.

World Bunkering caught up with him at a quiet time during what was a hectic couple of days at the Westin Arabella Quays hotel. Given that bunkering is still in a fledgling state in most of Africa with considerable investment in infrastructure clearly required, his answer to the question, “What is the biggest issue facing the continent’s bunker industry?” may seem surprising.

Without hesitation he said: “The environment.” Expanding on this, he explained that the offshore industry in West Africa, and Ghana, is growing quickly. West Africa is becoming a crude oil and gas supply hub. The countries in the region need to invest in emergency response equipment and in skilled personnel to be prepared to respond effectively to oil spills.

He said that as exploration and production of oil and gas intensified, careful management is required to ensure environmental issues and security lapses do not become big problems. “These issues have of course long been major headaches in some oil producing countries in the region.”

It was up to the oil companies to impose self discipline, he said. “If not we will be subject to imposed regulation.” Particularly worrying is the spectre of the situation in those oil producing countries that are experiencing environmental, security and safety problems relating to bunkering being replicated elsewhere. He said he found the piracy situation in the region and the market in stolen oil there “scary” and he stressed it was important to maintain control of the industry.

Investment in infrastructure is necessary, but it is happening, and being driven by the offshore oil activities and other private sector entities onshore. Although our discussion took place before oil prices performed their most dramatic nose dive he was confident that Ghana and other West African countries were in a relatively good position to weather the economic downturn. He noted that Ghana’s important commodity exports would be hit in a downturn but that the offshore oil fields would start to produce by 2010. That would help fill the vacuum as traditional exports struggled.

Hand in hand with the development of offshore oil in West Africa, the region’s bunkering activities are starting to take off. Partly this is because the region’s ports have expanded and improved ships can take on bunkers while working cargo. Agyemang-Duah says Ghana Oil Company Ltd (GOIL) already makes inshore deliveries and is now planning to enter the offshore deliveries segment. Ghana Bunkering Service, which is a subsidiary of GOIL, operates a storage tank facility at Tema port and is a physical supplier of MGO in Ghana.Image related to: Africa: exciting times for the bunker market.

Ghana Bunkering Service

At present availability of heavy fuel oil is limited and irregular except for offshore deliveries from storage vessels. This is likely to change as pipelines and storage tanks are built by private companies and more oil berths are provided. However, he says, more reliable infrastructure is needed for ship-to-ship and offshore bunkering to keep pace with growth. That means investment in barges and small vessels, and offshore storage vessels will be required to provide supplies of HFO and internationally priced MGO and MDO.

There are certainly major challenges ahead and Agyemang-Duah said aggressive marketing policies were needed to keep opportunities in the minds of investors. Capital is required to develop the infrastructure via offshore and onshore storage as well as barges for ship-to-ship bunkering. “Joint ventures and other strategic alliances will be the key to success,” he said, adding: “The bunkering business in Africa in general, and West Africa in particular, has exciting times ahead.”