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Tuesday, June 25, 2019

Cameroon’s SNH grateful for improvement in oil prices; other CEMAC producers too?


SNH grateful for higher oil prices

Moderately higher oil prices between Jan-Apr 2017 helped cushion the impact of lower energy output in Cameroon after the state oil company – better known by its french acronym SNH – reported a 32% increase in revenues transferred to the state compared with the same period last year.

Market data show Brent oil prices averaged $54/barrel between Jan-Apr 2017 vs. $37/barrel between Jan-Apr 2016, helping generate higher revenues for SNH despite the company reporting a 21% drop in output over the same period at 9.74 million barrels.

SNH sold 5.76 million barrels of crude oil over the period, down 30% y/y while at the same time it transferred XAF108.5 billion to the state after accounting for production costs.  SNH also revealed that revenCMR top 10ues generated from the Chad/Cameroon oil pipeline amounted to XAF9 billion between Jan-Apr 2017.

Resilient oil output in the CEMAC region

The oil market is currently trading below $50/barrel due to a global supply overhang, which may impair the fledgling improvement to terms of trade in the entire CEMAC region experienced at the start of 2017.

More constructively however, data from the US Energy Information Administration indicate resilient oil output in the region in 2016, notably in Cameroon and Congo Brazzaville. A Bloomberg survey of traders suggests shipments to Asia will increase in June with strong demand from India, China and Indonesia.

CEMAC oil

XAF=CFA francs; 1US$=XAF588

2 Responses “Cameroon’s SNH grateful for improvement in oil prices; other CEMAC producers too?”

  1. Nkemish
    June 12, 2017 at 19:44

    Great article as it kind of explains the headlines I saw on twitter earlier about loss of output. Informative. I’m a little bit surprised Cameroon is the least producer from the chart above. Unless I’m reading my colors wrong that is.

    • Editor
      June 12, 2017 at 20:50

      Thank you for your feedback. Cameroon is indeed the smallest producer among the five producing countries in the CEMAC region. As aide-memoire, CEMAC comprises Cameroon, Chad, Equatorial Guinea, Gabon, the Republic of Congo and the Central African Republic.

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FrancTrade provides independent analyses and commentary as well as bespoke commodities market intelligence to global and regional corporate and institutional clients with a stake in the Francophone Africa CFA franc zone. FrancTrade also publishes one-off special reports on commodities and trade in strategic West African markets, including Nigeria and Ghana.