Home World Africa Cameroon freezes $44.8m agreement between SNH and Savannah Energy

Cameroon freezes $44.8m agreement between SNH and Savannah Energy

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Cameroon freezes $44.8m agreement between SNH and Savannah Energy

Adolphe Moudiki, managing director of Société Nationale des Hydrocarbures (SNH), has suffered another setback in his bid to buy shares in Cameroon Oil Transportation Company (Cotco), which manages the Cameroon side of the Chad-Cameroon pipeline.

Following the board of directors’ meeting held in the Cameroonian capital Yaoundé on 13 June, the acquisition by SNH of 10% of Savannah Energy’s assets in Cotco was “frozen” following a decision by the chairperson of the board Ferdinand Ngoh Ngoh, who is also secretary general of the presidency.

Arm wrestling

Contested by Chad, the initial agreement – which was concluded on 19 April and amounted to $44.8m – has been at the heart of a tug-of-war between the Chadians and Cameroon.

The quarrel came to a head the following day, on 20 April, with the recall of the Chadian ambassador based in Yaoundé. Since then, Cameroon has stepped up its efforts to mollify tensions, with President Paul Biya sending Ngoh Ngoh to N’Djamena for talks with Chadian President Mahamat Idriss Déby Itno.

Biya also asked his trade minister, Luc Magloire Mbarga Atangana, to pass on Cameroon’s agreement for Chad to buy out the assets of Malaysia’s Petronas in Cotco to the Central African Economic and Monetary Community (CEMAC).

This “corporate open sesame” – essential under regional agreements – should enable N’Djamena to hold 53.7% of the shares in the company that manages the Cameroonian section of the pipeline – an objective that Déby Itno and his government were particularly keen to achieve.

A freeze, before the rest

However, N’Djamena did not accept Savannah Energy’s presence and remained determined to oust it from Cotco. A new round of negotiations was then held in Paris on 24 May at the Cotco board meeting.

The Chadian side – supported by Menguele Judith Clairence, the Cameroonian finance ministry representative on Cotco’s board – came up against Moudiki, who was in favour of maintaining the agreement with Savannah. The meeting ended without a definitive winner.

A few days later, however, the SNH chief attempted to replace Clairence. On 8 June, he was turned down by the presidency, which thereby signalled its agreement with Chad. Five days later, in a new round of talks, Ngoh Ngoh, obtained a freeze on the deal between Savannah and the Cameroonian oil and gas company.

The Chadian government has taken note of this decision, quietly welcoming it. But the decision is not yet final, as further negotiations are undoubtedly still to come on Cotco’s shareholding structure.

It appears that this oil dispute being contested by N’Djamena and Yaoundé is far from over.

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