India is one of Equatorial Guinea’s biggest importers of crude oil, but much of these sales have been the work of middlemen selling spot cargoes. That is about to change as part of the Ministry of Mines, Industry and Energy’s shifting petroleum export strategy with Asian economies.
“We want to eliminate the middleman,” said H.E. Gabriel Mbaga Obiang Lima, Minister of Mines, Industry and Energy. “We must work directly with the crude buyers. We have achieved this in our relationship with China and we will succeed with India as well.”
Historically, Equatorial Guinea has sold about 5 percent of its crude oil exports to India. In 2015, about 1.3 million barrels of crude was sold to India. Minister Obiang Lima said they would discuss up to 20,000 barrels per day of trade volumes with potential buyers.
“We are at the mercy of the market price,” the Minister said. “When prices are good, spot markets are favorable. When they are low, we get hit. We must work with long-term suppliers to stabilize prices over time.”
The benchmark for Equatorial Guinea crude is Bonny Light minus 20 cents on the barrel, which today trades at $29.47. This is well below its $83 trading price in October 2014. In this low price environment, Equatorial Guinea is implementing a new storage project to accommodate crude surpluses. The first phase of the Bioko Oil Terminal will create storage capacity of 680,000 cubic meters of crude petroleum. A second phase will increase capacity to 1.4 million cubic meters of refined products, including gasoline, naphtha, diesel, Jet A-1 and fuel oil.