The Africa Center for Energy Policy (ACEP) is confident Ghana will not be negatively affected by China’s recent decision to cut its imports of oil from West Africa.
China recently took the decision to cut imports of West African oil to the lowest in seven months in November, due to an increase in the cost of shipment.
As a result, West African oil loadings to Asia are expected to fall to about 2.33 million barrels per day (bpd) this month, equivalent to 70 percent of total exports from Angola, Nigeria, Republic of Congo, Ghana and Equatorial Guinea, based on Reuter’s calculations, shipping brokers and Refinitiv Eikon data.
This quantity highlights a significant drop when compared to October’s 2.52 million bpd, or 75 percent of total regional exports.
So how much of an impact will the cut in imports from China have on Ghana as an oil exporting country in West Africa?.
Speaking to Executive Director of ACEP, Benjamin Boakye downplayed the effect on Ghana’s oil export.
“Ghana’s oil hasn’t gone to China that much. I think it’s just a few consignments. Much of our oil goes to Europe, with a few going to the United States when they were not producing all that they needed. So China’s decision doesn’t really affect Ghana.”
Receipts from crude oil liftings in Ghana for the first 9 months of 2018, from Jubilee, TEN and Sankofa Gye Nyame (SGN) fields, amounted to GH₵2.72 billion Ghana Cedis. Meanwhile receipts from upstream petroleum activities are projected at GH¢5.4 billion in 2019, equivalent to 1.6 percent of GDP, and representing 30.3 percent growth over the projected outturn for 2018.
But for Ben Boakye, Ghana could earn more in the medium to long term while protecting itself from cut backs in imports from countries like China, if it accelerates its plans to make Ghana a petroleum hub in the sub-region.
“It’s not just about shipping the oil out, but how do we develop our own people on the back of our resources. Increasingly we are having to export the raw material and import the refined product which doesn’t make sense. We need to think of having our own refineries so that we can refine the products. That will also affect the cost of the product at the pumps since cost of freight and insurance are reduced and those can be passed on to the consumer.”
By: Bobbie Osei/citibusinessnews.com/Ghana