In a challenging turn of events, Equatorial Guinea, the smallest oil producer within OPEC and a West African nation, experienced a complete halt in crude oil exports in May. Petro-Logistics, a crude flows tracking firm, reported that output declines and the absence of new projects to compensate for the lost production contributed to this decline.
The recent data indicates that Equatorial Guinea’s crude oil exports reached a disheartening zero last month, underscoring the common dilemma faced by West African producers. Declining production coupled with a dearth of immediate projects to offset the decline has become a recurring theme for the region, as noted by Petro-Logistics.
Equatorial Guinea, which joined OPEC in 2017, boasted an average daily crude oil production of 289,000 barrels back in 2015. However, as of April this year, production plummeted to 59,000 barrels per day. While this figure represented an increase of 11,000 barrels compared to March, it signified a substantial decline from the country’s peak. According to OPEC’s Monthly Oil Market Report from May, Equatorial Guinea’s first-quarter production for 2023 averaged 54,000 barrels per day. This was a significant drop from the third quarter of 2022, when production averaged 90,000 barrels per day, and an even more drastic decline from the full-year average of 98,000 barrels per day in 2021.
Crude oil exports have traditionally been a vital source of revenue for Equatorial Guinea, with petroleum accounting for half of its export revenue in 2021, as per OPEC data. However, the country is now facing challenges as ExxonMobil, the largest oil producer in Equatorial Guinea, plans to cease operations and exit the country once its license expires in 2026. Reuters reported this development at the end of 2022, citing sources familiar with the matter. The West African region has posed difficulties for major oil companies due to higher costs compared to more lucrative projects elsewhere and the projects’ significant emissions profiles.
Equatorial Guinea’s struggle with declining production and limited investment mirrors the challenges faced by other West African producers and OPEC members, such as Nigeria and Angola. These countries have also grappled with falling crude oil output, primarily due to high costs and reduced investment from major oil companies in recent year.
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