OBG talks to Adama Toungara, Minister of Petroleum and Energy

  Interview: Adama Toungara

What do you expect from new partnerships?

ADAMA TOUNGARA: We want more active and dynamic oil exploration to demonstrate the potential of our sedimentary basin and to significantly grow national oil production. Since 2011, our efforts have enabled our partners to conduct 9717 sq km of 3D seismic surveys, eight exploration wells and six development wells for a total investment of close to $823m. This has resulted in three significant hydrocarbons discoveries at the Indépendance-1X well in the Vanco CI-401 block, Paon1X in Tullow’s CI-103 and Total’s Ivoire-1X in CI-100. In terms of partnerships, we accept all partners with the technical and financial capacity sufficient to carry out oil exploration and production. We also develop southsouth partnerships with other African partners from the sub-Saharan region. Between December 2011 and October 2012, we signed 14 contracts with French, American, English, African and Ivoirian oil companies.

How have changes in butane and pump prices affected the sector’s financial equilibrium?

TOUNGARA: In January 2013 there were increases in super gasoline and butane gas prices even as we maintained some butane subsidies. The impact on households was limited as these higher prices were already in place in the butane market beforehand, and now the government is striving to ensure that prices are applied. This measure has curbed the subsidy’s monthly deficit, which averaged CFA1.6bn (€2.4m) in 2012 and which made supplying butane to the country problematic as we were having trouble paying the subsidy due to companies. Since January 2013 this is no longer the case, but the government is now focused on finding the means to pay off the subsidy arrears, which totalled CFA25bn (€37.5m) at the end of 2012. In the meantime, the Société Ivoirienne de Raffinage refinery has absorbed this deficit, adversely affecting its finances.

In April 2013 the application of the automatic price fixing mechanism for petroleum products occurred simultaneously with the uniformisation of prices on conditioned butane across the country, which lowered butane costs in the interior. Prices on B28 butane bottles, which are also used by households, were lowered as well, while the government put in place the mechanisms necessary to sustain transportation costs for petroleum products subject to transport equalisation.

What are the main challenges facing downstream storage for petroleum products?

TOUNGARA: For liquid products, La Société de Gestion des Stocks Pétroliers de Côte d’Ivoire’s (GESTOCI) storage capacity is currently 354,000 cu metres, including 322,400 cu metres in Abidjan and 32,000 cu metres in Yamoussoukro, and excluding the depot in Bouaké that was destroyed during the crisis. There is no strain on demand, and GESTOCI has significant capacity. However, capacity is insufficient under the security stock policy, which requires storing the equivalent of two months of the previous year’s consumption. Security stocks are currently 15 days for super, five days for diesel and six days for oil. For butane, current storage capacity is about 7200 tonnes.

The main challenges, therefore, are to increase storage capacity, especially for butane. The strategy to carry this out is to expand the Yamoussoukro depot, adding 30,800 cu metres for liquid hydrocarbons and 20,000 tonnes for butane, and to build four new depots, with 250,000 cu metres and 12,000 tonnes in San Pédro and 74,000 cu metres and 17,000 tonnes in Ferké.

What pipelines are under way and how well do current transport regulations ensure security?

TOUNGARA: The multi-product Abidjan-Yamoussoukro pipeline has been completed and will soon be in service. The Yamoussoukro-Ferké section needs financing. Regulations for the transport of petroleum products in Côte d’Ivoire has to be put in place and adapted to the new challenges concerning transport to ensure security. Specific legislative documents for the transport of petroleum products are currently being prepared.