VENTURES AFRICA – Nigeria-based energy firm Sahara Group has revealed plans to expand its operations from West Africa to Middle East and far East markets, owing to increased world oil demand stemming from the East, chief executive of its trading division revealed as it announced production of its first crude oil.
“We are currently focused in fully developing one onshore block (OPL274), where we believe to get soon a peak production of mininum 25,000 barrels per day,” said the CE of Sahara’s trading division Fortunato Constantino
Sahara also expects to become a producer of liquefied natural gas (LNG) in the next few years through Nigeria’s long-delayed Brass LNG project, alongside shareholders Eni and Total.
“The plan of the shareholders is to take a final investment decision by the end of the year. We participate with a 2 percent stake and are willing to market a significant part of the 10 million tonne per annum plant production,” he said.
Sahara Group is known by rival traders for its ‘crude for product swaps’ with Nigeria. It buys crude from the country’s state oil firm NNPC, processes it at regional refineries such as in Ivory Coast and then sells the products back to Africa’s second largest economy.
While speaking to Reuters, Constantino disclosed that the firm’s next strategic step would be to source crude from beyond West Africa and gain better access to sour barrels, which are expected to account for a large portion of future Asian demand.
According to him, “The strategy is to balance our portfolio between West Africa and other regions to leverage our offer and possibly play the arbitrage. We want to be ready to benefit from more east/west arbitrage future windows.”
Constantino hinted on a proposed agreement with a refinery in the Middle East or the Far East. Although he did did not give further details.
Recently, Sahara started trading Libyan and Iraqi spot oil cargoes.
The firm has also opened a trading office in Dubai in late 2011 and has two traders based there, he confirmed.
Stringent environmental protection laws in Europe couple with enthusiasm shown towards sourcing cleaner fuels, such as natural gas, have crushed European oil refining margins, driving investors towards new plants in emerging markets including India and China.
Privately owned Sahara, which had a turnover of $8 billion in 2011, is one of the main independent exporters from Nigeria, Africa’s top oil producer, via term contracts with state oil firm NNPC.
The firm also has stakes in several offshore Nigerian oil blocks, including OL284 and OL286.