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Yes, I'd agree with you on that one TiL. I thought there was a good chance that we had lost control of the bank accounts, but if the article is correct then we should have been receiving revenues since the deal, and continue to do so. It's always difficult to read these things without knowing what is going on behind the scenes. If you read the Africa press it's clear that Chad and Cameroon appear to be brokering some sort of compromise between themselves. It's natural that they would put relations between the countries before agreements with a oil and gas company, but the article does suggest we have kept control of the cotco monies due to us which is a big positive. As we know things can change but I certainly don't take this article as particularly pessimistic.
Olderwiser - Nobody is joining forces everyone is basically got their own agenda. I personally feel as it stands as of today the Cotco holding is safe as the article suggests. This could change further down the line but we can only go by today's news.
I believe the Cotco situation has reached a stage where each of the 3 parties feel their shareholding is now equitable, and as the article seems to allude the chad government threat on freezing bank accounts is more to do with the chad doba oil field dispute and they thought they would use is a threat to Savannah so they fold in the icc dispute but Chad doesn't have the legal right or jurisdiction to freeze Cotco accounts.
"However, analysts have told African Energy it would be difficult to force the ambitious indie out of Cotco."
"Cameroon remains central to Savannah’s thinking, even more so since its assets were seized in Chad (AE 483/28). Chief executive Andrew Knott told shareholders in July that Cotco was a potential catalyst for further growth in Cameroon."
"African Energy understands that Savannah remains in operational control of the pipeline, which it sees as giving it the right to appoint Cotco’s general manager, who retains signing capacity over bank accounts. (This is a significant element, given past threats by Chad to seize control of bank accounts.)"
"However, African Energy understands that Cotco’s general manager has pointed out that it would be difficult to operate the pipeline safely were Chad to freeze the company’s bank accounts, as it would be unable to pay vendors or suppliers."
You're joking, of course.
Seems like even Cameroon, once thought to be a staunch ally of SAVE in this spat, is joining forces with the enemy.
SAVE will be the loser, whatever happens.
Nice one, AK.
Seems like Cotco shareholding is safe and we have access to bank accounts and revenues from Cotco.
Such a relief I must say.................................
Part 2
Meanwhile, Cameroon is keen to increase its holding in the pipeline, to reflect that most of the link runs over its territory, at 903km compared to just 178km in Chad, from where the oil is sourced.
In early 2023, Savannah agreed to sell a 10% interest in Cotco to SNH for $44.9m, leaving it with 31.1%. As part of the agreement, SNH and Savannah pledged to support one another as shareholders.
Recent reports from Cameroon said the 4 July meeting was precipitated by internal Cotco developments, including allegations that Savannah-appointed members of the board had threatened to shut down the pipeline. This was cited in a letter dated 30 June from Cameroon state minister Ferdinand Ngoh Ngoh to a colleague, suggesting the authorities in Yaoundé felt forced to take precautionary steps to ensure the pipeline’s smooth operation.
African Energy understands that Savannah remains in operational control of the pipeline, which it sees as giving it the right to appoint Cotco’s general manager, who retains signing capacity over bank accounts. (This is a significant element, given past threats by Chad to seize control of bank accounts.)
Savannah has made no official comment about the 4 July meeting. However, African Energy understands that Cotco’s general manager has pointed out that it would be difficult to operate the pipeline safely were Chad to freeze the company’s bank accounts, as it would be unable to pay vendors or suppliers.
That observation appears to have been taken by some as a threat, in the context of a wider dispute between Savannah and Chad that is subject to an arbitration process at the International Chamber of Commerce’s International Court of Arbitration, which is expected to last 18-24 months (AE 486/28).
According to one source who spoke to African Energy, boardroom machinations at Cotco – and the apparent rapprochement between Yaoundé and N’Djamena – may fit into wider dynamics in local politics, where factions are manoeuvring in anticipation that 90 year-old President Paul Biya will eventually depart and that control of SNH is a significant issue – and boon – for whoever emerges running post-Biya Cameroon (AE 479/35, 410/22).
Some elite factions in Cameroon are said to be more closely aligned with SNH than others – some of whom may be more open to dealing with Chad. Factional rivalry is said to be having a bearing on the management of the pipeline company.
Part 1
Chad-Cameroon: Cotco pipeline company meeting points to possible thaw in relations
Cameroon Oil Transportation Company’s new senior leadership team features figures from Chad and Cameroon, prompting speculation that their bilateral rift may be healing. UK-based independent Savannah Energy remains a central player, but may come under further pressure if the two governments start acting in concert, writes James Gavin.
The appointment of a new management team at Cameroon Oil Transportation Company (Cotco) has fed speculation that the rift between Yaoundé and N’Djamena over control of the pipeline link may be healing.
A board meeting in Cameroon’s commercial capital Douala on 4 July named Cameroonian Bako Harouna as chief executive and Chadian petroleum and energy minister Djerassem le Bemadjiel as chairman of Cotco.
Under the new arrangements, Bako – until now deputy managing director of the Port Authority of Kribi – will oversee the pipeline’s Cameroon section, while Bemadljiel will oversee the Chadian tranche.
Bemadjiel told reporters the two sides had put the “interest of our two countries above any other consideration”.
The bilateral spat began with a deal last December for ExxonMobil to sell upstream and midstream assets to United Kingdom-based independent Savannah Energy (AE 475/8). The transaction included a 40% stake in the Chad-Cameroon pipeline and was fiercely opposed by Chadian Interim President Mahamat Idriss Déby Itno.
In March, N’Djamena seized Savannah’s interest in Tchad Oil Transportation Company (Totco), which owns and operates Chad’s section of the Chad-Cameroon oil export pipeline (AE 482/19). Subsequently, Chad tried in May to force Savannah out of Cotco at a shareholder meeting held in Paris (AE 486/28).
Cotco’s management rejected that move, with general manager Nicolas de Blanpré – who is also Savannah’s Chad country manager – calling the meeting “illegitimate”.
Cameroonian national oil company Société Nationale des Hydrocarbures (SNH) wrote to Bemadjiel, pointing out it had not been invited to the Paris meeting.
SNH director-general Adolphe Moudiki has urged Chad to cede 20% of its stake in Cotco, leaving a share distribution of 35.2% for Cameroon and 33.8% for Chad. Moudiki is also understood to have urged the Chadian government to act to prevent a shareholder crisis.
While there has been no sign of a change to the shareholder structure, the bilateral atmosphere appears to have improved, which may add to the pressure on Savannah.
However, analysts have told African Energy it would be difficult to force the ambitious indie out of Cotco.
Cameroon remains central to Savannah’s thinking, even more so since its assets were seized in Chad (AE 483/28). Chief executive Andrew Knott told shareholders in July that Cotco was a potential catalyst for further growth in Cameroon.
With these announcements the truth is we will never know and we have to accept the RNS at face value. We have far bigger fish to fry at the moment and we can all review our positions after we relist. I personally was worried about the developments in Niger reported this week. This share remains my biggest in my ISA but I admit I am getting twitchy again
Perhaps I'm getting a little cynical in my advanced years, TiL.
Have been a happy holder here since 2017 and am now unsure if I should be excited or nervous about the imminent suspension-lift, whilst having every faith in the long term.
As I rarely post, I'll take this opportunity to say a massive thanks to all those super knowledgeable, generous posters who help me keep the faith..
ACboom - don’t think it is as sinister as you suggest “personal reasons” sounds more like she must have had a family or personal life event and means she could not fulfil her role to the best of her ability. That is all
She was only appointed 1st Feb this year.
"Sylvie is a seasoned professional in finance, with significant expertise across multinational businesses both in an executive management and a non-executive capacity as board member and audit committee chairwoman. She was formerly CFO of PSA Group (the CAC 40 automotive company now known as Stellantis), Deputy CFO of Société Générale (the CAC 40 bank), a Non-Executive Director of CFAO S.A.S. (the €5.8bn revenue African-focused automotive and pharma retail company) and a senior advisor to leading global professional services firm, AlixPartners"
Either she didn't like what she saw, of there was some kind of culture clash..
Rather hoping it's the latter.
"personal reasons".
Sounds like a compromise agreement.
Any thoughts on the why?
Rocky I think initial of 5k bopd was talked about through the export pipeline route, I am pretty sure that was mentioned somewhere a while back, obviously that would rise once all the connecting pipelines to our fields are up and running and once we have proved and booked more reserves, think it's not unreasonable to reach 15 - 20 k from Niger in 18 - 24 months. Although it will purely depend on what makes sense and is more cost efficient a development programme to prove more acreage or simply going out and buy the equivalent production in the market through the deals at that time.
I am sure AK would do whatever is most cost efficient in terms of capital allocation vs revenues generated. A bit like to 20mmscfd gas deal with AMOCON it was easier and cheaper to feed 3rd party gas than use more gas from our field..
Really looking forward to this. AK was talking about 1k to 1.5kboepd when we were going to truck and sell locally. Now that’s canned and we’re waiting for the imminent pipeline completion, I wonder what boepd we will start pumping in to it. We will be running a well test program in Q4 and I assume it will include testing all 5 discovery wells. I think we will have plenty of capacity available to us re the new pipeline, so will we produce from just Amdigh or possibly all 5 wells? If we produce from all 5, don’t be surprised to see way more than 1.5kboepd. We are long overdue a nice surprise and a bit of luck.
Question for folks on here - I know we are fully focused on Africa under the project that matter strategy banner but would we ever consider getting a foothold in a region which isn't Africa just to have geographical diversification.......................
Has this question ever been posed to the boards and what was that thoughts around a wider geographical diversification, surely there must be other good deals in other regions apart from africa as well
In summary, all SAVE holders make millions out of their investments.
Caution - Outstanding list and there isn't anything that it too much to ask there. I am surprised that we haven't been more aggressive with additional accugas gas contracts, those would be nice quick wins for the company whilst all the other transformational stuff works it's way through in natural time................
Let's hope they can announce some more bolt on opportunities for Nigeria . I would imagine there must be plenty of bolt on opportunities that can be tied pretty quickly to the existing pipeline network plus the buoyancy of the new president and the drive for investments should make the conditions favourable.
There is so much growth potential for the accugas asset in terms of spare gas throughput that we can double our business.
Thanks for putting the checklist together it's really helpful and serves as a reference point for all that is being worked on by the company as we speak.........
While we await news, in no particular order, here is my (highly-entitled and presumptuous) wishlist for Savannah’s achievements over the next twelve months and its position a year from now. Some are obvious, others less so. Some are transformative, others somewhat smaller. This is armchair CEO stuff: these things are easy to wish for, much harder to deliver. And, goodness, it’s a long list…and most items are worthy of an RNS in their own right. There must be fairly significant elements of capital constraint to this list too.
There’s obviously an element of Walter Mitty to this, but it does at least give a sense of what is underway. If half of this happened…wow. I wanted to give myself a sense of the tasks in hand.
1. South Sudan closed with full government approval. No distribution impact from Sudan conflict. Revenue being booked.
2. Another hydrocarbon deal (as advertised by AK) closed with full government approval.
3. ICC final ruling on Chad.
4. If ICC rules in Savannah’s favour, and Chad fails to pay up, the beginning of injunctive proceedings by Savannah over Chadian oil delivered to Kribi.
5. If ICC rules in Savannah’s favour, repayment of the Exxon facility in its entirety.
6. 10% sale of COTCo portion to SNH completed.
7. Dividends from COTCo flowing to Savannah.
8. Project sanction from Cameroonian government on Bini A Warak hydro.
9. Completion of the Transitional Facility for Accugas.
10. Significantly reduced currency exposure to NGN (I still believe we’re booking a hefty fx loss for 2023 even though the floating Naira improves matters going forward).
11. Material progress on pay down of Accugas debt such that the burden of interest expense on the P&L starts to meaningfully reduce.
12. A couple more creditworthy Accugas customers added.
13. Accugas customers taking more of their catch-up gas such that deferred revenue starts to reduce, rather than grow and the statutory revenue numbers start to look more attractive.
14. Completion of Uquo compression project.
15. Niger R3 spur pipeline completed, tied in commissioned.
16. Completion and commissioning of the Amdigh EPF.
17. Timetable for construction of gathering system from neighbouring fields to Amdigh.
18. First oil from Amdigh and a clear roadmap to first revenue.
19. A CPR as far as is possible on R3E to give some 2P visibility.
20. Project sanction on Tarka wind and a costed roadmap to commissioning.
21. Relisting. Company big enough that a further suspension for RTO reasons highly unlikely.
22. Meaningful measures to reduce key-man risk on AK. Only the company can determine how this is best addressed.
23. A return to (reasonably) regular video presentations and Q&A from AK. But also including NB giving the input on the finance and accounting side.
24. A more visible Chairman; especially in terms of driving the B to G elements of Savannah’s business.
RockyRide - Missed you yesterday thought you had gone into hiding was about to send a search party out looking for you. Yes I have noticed that they are stepping up comms on Twitter hopefully this is a good sign.......... Also having the South Sudan ministerial team in London for the conference is perfect timing My guess is once the conference finishes today they would probably have a few meetings lined up with Savannah Thursday / Friday to discuss acquisition and current state of play, with possibly new next week.
Personally I am taking silence as good and hopefully means that they are really pushing for the 28th July as I am sure the Nomad would be aware of whether they can still achieve this so I am guessing as of today they don't see a need to push out further hopefully otherwise if the nomad had received a notification or request to extend they would have informed the market but lets see.........
A few new tweets. Savannah doing some excellent networking. Let’s hope it all pays off. They certainly have quite a chunky pay-roll spend now and Accugas alone cant keep funding the company of this size single handedly.
South Sudan Oil Minister day 2 in London
https://twitter.com/puot_kang/status/1681653835125727233
Bazoum to set up new oil firm despite opposition
Published on 19/07/2023 at 04:40 GMT
The creation of the state-owned PetroNiger was due to be made official at a 7 July cabinet meeting but was delayed until a future gathering of ministers because Ibrahim Mamane, the head of of the Société Nigérienne du Pétrole (Sonidep) and a close friend of President Mohamed Bazoum, tried right up to the last minute to prevent the new firm coming into being. The establishment of PetroNiger removes all exploration and production powers from Sonidep, which will henceforth only only manage the distribution of petroleum products from the Zinder refinery, operated by the Chinese company CNPC (60%) and the Nigerien state (40%).
With the imminent start of crude oil exports from Agadem via the pipeline to the port of Sèmè in Benin, which will be operational from the last quarter of 2023, Bazoum wants to create a company focused exclusively on exploration and production. PetroNiger will manage the state's 15% stake in the Agadem oilfield, which is currently producing 20,000 barrels a day, with output due to soar to almost 120,000 barrels a day by the end of the year.
PetroNiger will also be in charge of all the interests currently held in the other blocks that will soon be under development: Savannah Energy's R1, R2, R3 and R4 and Sonatrach subsidiary Sipex's Kafra, as well as the exploration blocks that could be awarded in the future by the Ministry of Oil, headed by Mahamane Sani Mahamadou, aka Abba, who is the son of former president Mahamadou Issoufou.
3pm yesterday, 100% margin on SAVE and and increase on THG made for a tricky day!
Spoke to the IG desk, and asked the obvious question 'why'.
" Nothing to do with us, our broker increased so we have to increase - we just pass it on"
He did say he was "sorry", so that made it all ok 😬
Countdown 7 days to go........................