Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter in Africa has disclosed that Savannah Midstream Investment Limited (SMIL), has signed a Share Purchase Agreement (SPA) with the national oil company of Cameroon, Société Nationale Des Hydrocarbures (SNH), relating to the sale by SMIL and purchase by SNH of 10% of the issued share capital in Cameroon Oil Transportation Company S.A. (COTCo).
In December 2022, Savannah Energy announced the acquisition of ExxonMobil’s asset in Chad and Cameroon and the announcement came after Savannah Energy and ExxonMobil’s signed the Share Purchase Agreement in 2021, which saw the Savanah acquiring a 40% interest in the Doba Oil Project in southern Chad as well as a 40% indirect interest in the Chad-Cameroon export transportation system, which comprises a 1,081km pipeline and the Kome Kribi 1 floating production storage and offloading facility (FPSO), offshore Cameroon.
ExxonMobil’s stake in Chad and Cameroon, previously estimated at US$360mn, contains fields producing 33,700 bopd, with the Doba oil project alone – a prospect that comprises seven producing oilfields – boasting a combined output of 28,000 bpd.
COTCo owns and operates the 903km Cameroon section of the Chad-Cameroon export pipeline, the Kome Kribi 1 floating storage and offloading facility and related infrastructure. The pipeline has a 250 Kbopd nameplate capacity and is the only international export route for oil production in Chad. During 2022, COTCo transported an average of 124 Kbopd of crude oil valued at an estimated US$4.6bn at the prevailing Brent crude oil prices.
In consideration for the sale of the Shares, SNH will pay a cash consideration of US$44.9 million to SMIL. The Consideration, when received, will be used by the Savannah group for part repayment of existing debt facilities. Completion of the transfer of the Shares from SMIL to SNH will result in SMIL shareholding in COTCo reducing from 41.06% to 31.06%. Completion shall occur upon satisfaction of certain conditions precedent related to amendments to the bylaws of COTCo and is expected to occur in H2 2023.
SMIL will retain the right to the dividend attaching to the Shares until the date of payment of the Consideration. Pursuant to the terms of the SPA, SNH and SMIL have pledged, inter alia, their support of one another as shareholders in COTCo.
