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K - why would Citibank want to do that. Surely if they won the funds would simply be sent to Chad? And I don’t know why they would want that to happen.
Am clearly not getting this but very happy to be educated. TIA
For info, Citybank have lodged an appeal against the ruling.
Interesting to see divisions forming now in the upper echelons of chad politics they will be some sections of the political elite who may start to pivot or panic now that they have lost access to funds from Cotco bank accounts and you have to remember that those funds would be funds relating to all shareholders so that also include the petronas share in cotco that chad bought which will be frozen as well until share holder dispute has been settled at icc. This may cause some in the chad political system to panic as it very likely to decimate chad oil industry and its role in effectively being able to govern nationalised assets.........................
This could be a good thing for us as now it seems like not everyone will continue to back this nationalisation if they can see the visible benefits $$$$$$$$$ and funds are frozen until further notice........... This could lead to 2 things
1) Chad losing at ICC will mean Savannah will re-coup funds through Cotco leaving Chad with very little of Cotco revenues of whats left over at that point if any.
2) The chad government will have to come to some sort of a compromise the longer it doesnt have access to funds the longer questions will be asked from sections of chad media and politics to outline the benefits of nationalisation.
Perhaps to save face and pride some sections of the chad political elite may continue with the case till the very end however there will be some that may be willing to come to some sort of compromise. So a tug of war is definitely on the cards in chad politics and oil nationalisation will be at the heart of it.
If we can sale than we continue to benefit from income which contributes to that 10% in cotco albeit the funds will be frozen in the citi bank account so just mean we will be able to access a greater percentage of cotco revenues post icc tribunal until we can sell.
Guess this has become a little more tricky.
Interesting the comment about trying to compensate Exxon ?
I can't see Exxon playing ball with them personally
Article with comemnts from Chad including arbitration set for June 2025!
'New twist in the standoff between the Chadian government and the Savannah Energy company, which bought ExxonMobil's shares in Chadian oil since the end of December 2022. A decision contested by Ndjamena which has since nationalized its oil. After obtaining from the International Chamber of Commerce in July the annulment of a decision which expelled Savannah from the board of directors of Cotco, which manages the pipeline between Chad and Cameroon, this time, an American judge of the Court of First body of New York decided to freeze last Friday, some 151 million dollars lodged in the account of this company in the Gabonese subsidiary of Citibank.
Ndjamena contests this decision of the American judge who orders one of the largest international banks, Citigroup, to order its subsidiary Citibank-Gabon to freeze the funds held in the Cotco account, with the exception of payment current charges.
Citibank Gabon is not its branch, and as such, depends on Gabonese law. “ It therefore does not have to respond to the injunctions of American justice ,” argued the Chadian Minister of Oil, Djerassem Le Bemadjiel. And for those who say that this decision by the American judge is “ a hard financial blow for the Chadian government ”, “ it is false, absolutely false ” he insisted.
This sum of 151 million US dollars corresponds only to the dividends generated on the transport of Chadian crude oil by the pipeline between Chad and Cameroon in 2022, explains the Chadian minister. Only 24% of these funds must return to Chad. “ This does not even represent 2% of our annual oil revenues ,” he assured.
Cotco said it had transported Chadian crude oil worth an estimated $4.5 billion in 2022 (nearly 2.7 trillion CFA francs). The Chadian minister also assures, with supporting documents, that his government was the first to request a freezing of Cotco's account at the end of May of this year, in order to prevent " the Savannah company, which we do not recognize, Don't go and dip into that ."
As for the case between the Chadian government and Savannah Energy, ousted from the Chadian oil company by Ndjamena after it bought ExxonMobil's shares in Chadian oil, it will be decided from June 2025 before the Court of Arbitration International Paris, according to the Chadian side.
In the meantime, Ndjamena assumes the “nationalization” of its oil. “ We are working to compensate ExxonMobil for its shares ,” explains Djerassem Le Bemadjiel. He expects “ in return ” from the American major that it will “ compensate ” Chad for leaving without having restored the polluted soils.'
https://www-rfi-fr.translate.goog/fr/afrique/20230920-tchad-la-justice-am%C3%A9ricaine-ordonne-le-gel-des-comptes-de-cotco-%C3%A0-citibank-gabon?fbclid=IwAR0WMeMMEg1hisf5vLIKy2tGN1N2NREaw-0Q_v7ZShEHw2da9ZXWdp39bFI&utm_medium=social&utm_campaign=facebook&utm_source=shorty&_x_tr_sl=fr&
I wouldn't mind if we went for this deal. Nigeria plus offshore. OML 128 & OML 129 are strong assets being looked at by many. 25,000 bopd probably less than quoted $1bn would be a tasty deal.
https://www.reuters.com/world/africa/equinor-joins-western-oil-firms-retreat-nigeria-sources-2023-01-25/
Profuond words from what sounds like a very disgruntled man
Cont.
No one will demand accountability, from the actors often the same, when the staff of the TPC (e.g. Esso) of Doba lose their social gains and rights built over the duration of a working life, by the act of prince or in due to governance which will only be disastrous for the company.
What else can we expect from a regime whose parliament, a high place of public debate and national deliberation, finds nothing better than to distort and sabotage itself by voting on motions of support for the government on a draft text which is submitted to it and as a prelude to its examination in plenary? Nothing.
What else can we expect from a regime which organizes without qualms, in front of the Minister of Justice and the president of the National Transitional Council (parliament), a public ceremony of contrition for victims of mass massacres of October 20, asking forgiveness from their executioner to whom they address, the height of ignominy, their thanks and recognition? Nothing neither.
Cont.
Indeed, how could the eggheads of the Palais Rose, the Government and their councils imagine that a Chadian domestic law (law of the nationalization of oil assets) could have a foreign effect to authorize an application to goods? falling under the jurisdiction of another State, in this case that of Cameroon with regard to the rights in the capital of COTCO? It is the squaring of the circle that they will now have to resolve to convince the arbitral tribunal of the validity of Chad's claim to deny the status of shareholder of COTCO in Savannah. And for once they will have to work and rack their brains. But there are reasons to doubt it as they have acquired a taste for laziness and ease due to the obsequiousness and servility of all the counter-powers (justice, parliament, media, most of the population). political class and civil society organizations, traditional chiefs, etc.), to rather pass the dishes and even anticipate the desires and states of mind, formerly of the monarch Deby father and today of the eponymous Prince and their cronies .
The international legal order is not soluble in Chadian law and even less in the ukases and abuses of the regime. And it is vain to plead once again, after the first failure in January, the incompetence of the CCIP-CA as the “oil task force” and its councils clumsily did, since Chad is indeed a signatory. of the 2016 COTCO statutes stipulating the arbitration clause establishing the jurisdiction of this arbitral jurisdiction to hear any dispute arising from the application of said statutes.
But beyond the verdict itself, the July 31 press release from the Minister of Oil and Energy reporting on the arbitration award is matched only by the Orwellian models of communication in “Animal Farm” or “1984”. Indeed, in his press release, the minister shamelessly ignores the nevertheless implacable system of the decision for Chad, to propose only a trivial and isolated reading of a segment of the motivation and allow him to plaster the many clichés times served, while the arbitrator himself, author of said reasoning, does not take it into account in the system which nevertheless protects the decision. This is, at the very least, dishonesty. However, it is very serious because his word commits and obliges the Chadian State. In a respected and respectable country, this is nothing more, nothing less than a state lie intended to stir up all citizens and lead the government to draw the consequences. But in Chad, nothing will happen. No one has ever called to account the actors, often the same ones, of the Glencore fiasco whose agonies the country is suffering and will continue to suffer for a long time. No one will ever hold the actors, often the same ones, accountable for the financial abyss to come from the cavalier nationalization of Doba's oil assets.
Cont..
Thus, in this case, Savannah, of which Chad forcefully asserted, comments and publicity that it no longer has the status of shareholder of COTCO due to the law nationalization of petroleum assets, was nevertheless declared admissible by the pre-arbitration order to act in this capacity. This means that Savannah remains and remains until the outcome of the trial on the merits, a shareholder with 41.06% of the capital of COTCO. Consequently, the order grants almost all of Savannah's requests, in particular:
- suspend the effects of the decisions taken at the COTCO general meeting in Paris on May 24, 2023: concretely the decision “blocks” on the one hand, the dismissal of the directors of Savannah, decided at this meeting; it thus reestablishes their legitimacy as directors of COTCO. Conversely, the order “blocks” the appointment of directors from Chad in COTCO, made at this meeting. Very clearly, the directors appointed by Chad since May 24, 2023 can no longer sit on the board of directors of COTCO until the decision on the merits.
- suspend the resolutions of the board of directors of July 4, 2023. The order decides on the one hand to “block” the dismissal of the COTCO directors appointed by Savannah. On the other hand, it “blocks” the COTCO leaders appointed under CHAD, i.e. the current PCA, the DG and the DGA. Thus the managers appointed by Chad cannot direct and represent COTCO, nor convene a Board of Directors and even less a general assembly until the decision on the merits. Those appointed by Savannah are reinvested in their prerogatives as directors of COTCO, as they were before the general meeting of May 24, until the decision on the merits.
- prohibit Chad from presenting itself as a new majority shareholder of COTCO.
But, conversely, the pre-arbitral award rejected all of Chad's requests.
In short, in the state of the pre-litigation, it is a scathing berezina from the “oil task force”. This verdict would have been a real laugh considering the indecency of the jubilation and the boasting of the "task force" if not for the millions, even billions of FCFA in fees and expense accounts swallowed up on the back of the Chadian taxpayer through so much amateurism coupled with profiteering.
Yes, thanks noix, I got sidetracked and didn't look up the referenced article. Both articles at least show that there is a voice in Chad that sees things in a more realistic way. Whether this translates into a change of tack from the Chad govt. I very much doubt but it can only help. For those interested this is the translation of the article noix posted.
'In a colorful ceremony, of self-persuasion and self-congratulation on July 7, 2023, the “oil task force” of the Presidency of the Republic, praised through the voice of Gali Ngoté GATTA himself, the visionary genius and patriotism of the President of the Transition in an enchanted optimism mixed with beatitude. This lunar celebration, to say the least, defies the prudence and reserve that the tables of science advise in terms of economic forecasts and operational results with regard to the exploitation of nationalized assets. But it is also because the final word on the arbitration body in the COTCO dispute with Savannah is still far from being said and moreover, the country has not yet paid the first cent, hundreds of billions of FCFA compensation for the nationalization of Doba's oil assets. Compensation that the country could not honor from its own resources alone and the principal amount of which increases with each passing day, just as the interests continue to multiply in small amounts.
In a previous column in Ialtchad in two parts: “OIL ASSETS, POISON OF A PATRIOTISM OF EMOI”, we provided an analysis of the economic, legal and strategic heresy of the cavalier operation of nationalization of assets Doba oil tankers. Since then, the aforementioned ceremony of hubris has been held, but also the pre-arbitral order of the ICC-CA of Paris in the aspect of the Savannah dispute against the Chadian State regarding the rights of this here in COTCO. Certainly, it is only a precautionary decision, that is to say, a decision which freezes, freezes or suspends as is (status quo ante), the situation of the parties (rights, obligations , quality, interest etc.) to a dispute to avoid an irreversible development due either to urgency or to the damage suffered and its aggravation, pending an in-depth examination, otherwise, a more in-depth assessment of the facts and the respective arguments Parties.
Even if in principle an interlocutory order does not prejudge the judgment on the merits, it nevertheless gives, through a summary analysis, certainly cryptic, but quite eloquent indications of the reception, the sensitivity and the beginnings of the conviction of the person(s). summary judges with regard to the dispute, and therefore the chances of success in the upcoming trial of each of the parties.
Komakino
The final sentence in the first part of your post of the article in Lalchad - "Et la loi d’Airain frappa le Tchad publié dans nos colonnes," (your law of iron) refers to the following article.
hTTps://www.ialtchad.com/index.php/details/item/2887-affaire-savannah-et-la-loi-d-airain-de-l-arbitrage-frappa-le-tchad
The message conveyed by the use of the Loi d'Airain in the articles title, is that one cannot escape from the relentless, inescapable rules, in this case, of the international order.
They have gone against convention in nationalising the assets in isolation and of secondary importance, without due notice.
They also ignored the contractual notice period for raising any objection to the sale from Exxon to Savannah and I suspect the reason was that they were playing for time to give Perenco a chance to act. On the face of it their actions appear to have blown up in their faces.
The NY court decision will have been a very hard blow and will have focussed quite a few minds at the top level in the Republic of Chad.
In short the noose is tightening.
Good to hear that there is some kind of balanced mindset still in Chad, hopefully these idiots will realise they can not just roll international business like it is a sweet shop
If we lose the SS deal and go directly into another one which is quite possible - maybe not…
But at the moment I have a positive mindset for SS to close and that should “hopefully” be the end of RTO’s and mandatory suspensions.
Are you sure we’d be out of suspension by December 2024 RR?! ;)
Kak - excellent find mate at a bit of pleasant reading. I originally bought in 2015 and built my stake since then.. For quite some time I had a maximum target sell date of Dec 2024. Whilst SAVE maybe quite a tasty price by then, it may also take a bit longer than that with how slow some of these processes take. Also, even if I were to reach my TP by Dec 2024, a potential tasty dividend may convince me to hold beyond my initial target timeline.
There is a hell of a lot going on in the company and we are being recognised all over the place. The most recent Tweet on x.com
#Savannah is delighted to announce that we have been shortlisted in the upcoming 2023 Corporate & Financial Awards in the categories of both 'Best Printed Annual Report' and 'Best Online CSR or ESG Report.' The awards will be held on 15 November 2023 in London. We are delighted to be recognised for our 2022 financial and sustainability reporting, which highlights our business purpose of delivering ‘#ProjectsthatMatter’ and provides a deep-dive on ‘Why we do what we do’ bit.ly/3EGtMnk, underpinning our efforts to address energy poverty in Africa through both hydrocarbon AND renewable energy.
Finally, I know Zengas will have an EAGLE eye on the net debt number when SS is hopefully announced as completed AND with Brent at $92 this will be doing us a World of good.
Cont:
'Finally, at the time of publishing this editorial, no one can measure the financial consequences of this decision on public finances, on the economy and on public interest projects. One thing is certain, this protective sentence resembles, in its financial implications, the slap in the face inflicted by the Swiss company Glencore in 2014 regarding a bogus financial arrangement which plunged the country into a severe economic crisis. At the time the Marshal punished, even if it was symbolic, those responsible. The PT should also punish those responsible and advisors in this matter. The Chadians will be grateful to him.'
https://ialtchad.com/index.php/details/item/2964-affaire-savannah-gel-de-fonds-deni-tchadien?fbclid=IwAR0Bn7AzXARDXW311pYjPI_r9Xtfa4F7UCxnkIis-xtW8YOyrGBOdoE4NOg
Interesting editorial from one of the main periodicals in Chad, Ialtchad:
A few weeks after the Arbitration Court of Paris, France, found Savannah's complaint regarding the nationalization of its assets admissible in form, another tile has just fallen on the heads of the authorities of the transition. American justice ordered last Friday the freezing of Cotco funds at City Bank, the Gabonese subsidiary where oil revenues from Doba wells are deposited. This decision is immediate. No more movement of funds until the final outcome of the dispute. According to several sources close to the City, 150 million dollars belonging to Chad are currently frozen.
At the time, the transitional authorities had decided to go in force, under fanfare, by proclaiming publicly that the nationalization of the British company's assets was a matter of national sovereignty. And they everywhere affirmed that it was a good decision flattering the primary patriotic ego of several compatriots. Any contrary opinion reminds them that the debate is not about nationalization but about the method or the savage way of proceeding in defiance of all the elementary rules. And outside of any reflection and proposal from experts. It was a nationalization “Ab goudoura, goudoura” (with forceps).
Today in the Chadian capital, N’Djamena, the authorities have adopted two attitudes. That of the carp and the Ostrich. At the top of the state, the transitional president and his Prime Minister are silent as carp on the issue. At the second level of the transition, those who led the nationalization assault, the Minister of State, Secretary General of the Presidency (SGP), the Minister of Energy, the Minister of Finance and the entire team are doing the Ostrich by burying their heads in the oil wells of Doba. In short, it’s radio silence at all levels. Is this the solution? No.
First, we will have to resolve to come out of denial and speak publicly about this issue to enlighten Chadians by explaining the strategy to adopt and the reasons that support it. Because it is simply in the public interest.
Then, the Transitional President must sanction those who encouraged him to take the path of this wild nationalization. At a minimum, the decoration and elevation to the rank of “whatever thing” of the “oil task force” as Professor of Law and Lecturer at the University of Orléans Abdoulaye Boitaingar would say in an excellent paper titled: Savannah Affair : And the law of Iron struck Chad published in our columns, must be canceled.
Also Truck loading oil tanker gantry being built, So if there are issues with export pipeline than potentially oil will be trucked........,
https://www.linkedin.com/posts/eugene-muya-702383140_steelstructures-bimtechnology-activity-7108386821004308480-hhlB?utm_source=share&utm_medium=member_desktop
Should give us some security if export pipeline is disrupted. Good sign that they are expediating background work so if there is a need to seek an alternative route than the infrastructure is there to make it possible quickly
Interesting to see plenty of Infrastructure upgrades and pipeline work taking place or started already on the assets at operating companies
https://www.linkedin.com/posts/olga-international-limited_construction-underground-flowline-activity-7097879766669623297-DZ7d?utm_source=share&utm_medium=member_desktop
https://www.linkedin.com/posts/swaed-for-petroleum-and-technical-services-co_swaedforpetroleumandtechnicalservicesco-petroleumservices-activity-7096204380575531008-flKx?utm_source=share&utm_medium=member_desktop
https://www.linkedin.com/posts/olga-international-limited_welding-weldinglife-fittup-activity-7094604104974409729-vf_7?utm_source=share&utm_medium=member_desktop
SOG - great post and it would be great to see a meaningful adult expansion / additions to what you’ve written over the next few days. We can then let IR know (although I’m pretty certain they are reading anyway), that they should see this board prior to arranging the comms around the interims. Even though the company can and should remain tight-lipped re CC & SS, surely they have a right to give us more detail on our core business.
Thank you Sajy - your update & sharing is v much appreciated!
Agree an update from CEO on strategic deals / progress, would be good, BUT It would be great for the CFO to take us through the interims as would be best practice - other nat resources / commodity names (listed & private) always have the CFO explain the numbers to investors, and, to fold in RR theme from other post, would show team leadership, not just one man show.
It’s going to be a very technical set of interims which a CFO should speak to - eg1 the Nigerian FX piece (I am braced for material negative short term impact, despite the sunny uplands assurances of positive long term); eg2 CC revenues - few months’ upstream and cotco (~40% of $155m treated as receivable?), provisions (?), CC fees; eg3 newly amended pxf terms will show up in numbers(?); eg4 new / renewables fte impact at Head Office on the HO / management costs, etc, etc. At the AGM was poor CFO not present and it was suboptimal not to get a clear and thorough explanation of FX, when everyone on the EM ‘street’ was aware that there were / are big issues with $ in Nigeria, and SAVE had material NGN deposits. To name a few. Not the CEO’s role to explain this stuff.
DYOR Cheers