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The Minister of State Secretary General to the Presidency of the Republic Ferdinand Ngoh Ngoh affirms that during his audience with the transitional President Mahamat Idriss Déby, certain misunderstandings on the Savannah Energy affair were dispelled.
Dispatched to Chad by the Head of State, the Minister of State Secretary General to the Presidency of the Republic (SG / PR) Ferdinand Ngoh Ngoh was received this afternoon by the President of the Chadian transition Mahamat Idriss Déby. At the end of the hearing, he spoke at the microphone of our colleagues from the National Post. The SG / PR reassures that relations between Chad and Cameroon, which we thought were plunged into crisis, remain in good shape.

“…The two Heads of State are “willing to continue working to strengthen these relations for the well-being of their States and their peoples”, added Ferdinand Ngoh Ngoh.

In addition, SG / PR Ferdinand Ngoh Ngoh indicated that all issues related to the Savannah Energy case have been addressed.

“Some misunderstandings have been cleared up and there really is no cloud in the relationship between Cameroon and Chad,” he added.

Chad are probably still paying salaries as they are probably still in receipt of the oil income which they than distribute to other partners i.e Petronas and chad, so would probably make sense for them to continue paying the salaries. My guess is they will ring fence the income and revenue from chad doba fields and continue to pay using the revenue from the field, however for accounting purposes they will not include the doba field revenues until the matter is fully resolved and put to bed. It would still be nice for the company to clarify who receives the revenues and the detail behind the corporate structure seen as we are still paying salaries we are well within our right as shareholders to have a clarification on this point perhaps a nudge to IR might work

Part 2

Chad's former president Idriss Déby, the current president's late father, agreed in principle to this but did not make good on its promise. Nearly ten years later, and after the announcement in 2021 of the sale of ExxonMobil and Petronas shares to Chad, a close friend of Biya, former Cameroonian minister Amadou Ali, went to meet Kaka last year on 15 April to ask him once again if Chad would agree to cede part of the percentages formerly held by ExxonMobil and Petronas to Cameroon.

Déby agreed in principle, but did not follow through. In November, the deputy secretary general of the Cameroonian presidency, Elung Paul Che, met with Chad's Finance Minister Tahir Hamid Nguilin and Oil Minister Djerassem Le Bemadjiel in N'Djamena, but again no agreement was signed.

Savannah plays it safe

On 9 December, Savannah announced that it was the official owner of ExxonMobil's 40% stake in the Doba fields. On 12 December, Cameroon voted to allow Savannah to join COTCO and to replace the ExxonMobil directors with Savannah directors. On 26 December, a panicked Kaka requested an audience with Biya, but again in vain.

Savannah needs to stay on good terms with Cameroon as it is in the process of taking over the management of the 75 MW hydroelectric dam of Bini a Warak that the Chinese firm Sinohydro built with funding from the Industrial and Commercial Bank of China (ICBC). The project was abandoned last year due to the Cameroonian state's failure to pay ICBC. Savannah is believed to have agreed to contribute to the settlement of the outstanding financial issues.

Low profile

Savannah has kept a low profile since the announcement of the nationalisation of ExxonMobil's assets by Chad on 23 March. The salaries of the workers and managers of the former ExxonMobil subsidiary are being paid by Savannah, despite the nationalisation, and the firm is awaiting the outcome of arbitration launched last year at the International Chamber of Commerce (ICC) after a Chadian court decision of 14 December suspending the sale (AI, 05/04/23). A decision by the three appointed judges at ICC is expected next year.

When Savannah arrived in Chad in 2022, a few months before ExxonMobil officially resumed operations, it appointed a local deputy managing director, Arabi Khalil Djalal, who is close to the noted Senegalese architect Pierre Goudiaby Atépa.

Djalal paid a heavy price for accepting the job. He spent nearly a month in prison in N'Djamena on the orders of Kaka's chief of staff. He was released on 18 April this year by an N'Djamena court and then travelled to Cameroon, where he has since remained.

With N'Djamena in conflict with Savannah Energy, Chadian President Mahamat Idriss Déby pushed his Cameroonian counterpart not to legitimise the British junior's stake in the Doba-Kribi pipeline, which exports 100% of Chad's crude. In vain.

Chad's recall for consultations of its new ambassador to Cameroon, Djidda Moussa Outman, on 20 April is merely the latest stage in a long deterioration of the two countries' relations.

Chad junta leader Mahamat Idriss Déby, aka Kaka, tried for months to convince Cameroon to block Savannah Energy, with whom N'Djamena is in conflict. But without success.

The British junior agreed on 20 April to sell 10% of its shares in Cameroon Oil Transportation Co (COTCO) to Cameroon's state-owned Société Nationale des Hydrocarbures (SNH) for $44.9m, allowing the latter to increase its stake to 15%. COTCO manages the pipeline linking the Doba fields in Chad to the Cameroonian port of Kribi.

From Savannah's standpoint, the transfer legitimises its acquisition of the 40% stake in COTCO that ExxonMobil sold it in December - and which the latter's board of directors ratified on 12 December - as well as a similar percentage of the Doba fields in southern Chad, which Chad refuses to give it.

Chad is at war with Savannah. On 23 March, N'Djamena nationalised the shares in the Doba fields sold by ExxonMobil (30,000 barrels per day) as well as 40% of the Chad Oil Transportation Co (TOTCO), which manages the few kilometres of the pipeline that run through Chadian territory (AI, 05/04/23).

Chadian presidential chief of staff Idriss Youssouf Boy asked his Cameroonian counterpart Ferdinand Ngoh Ngoh in late March that Yaoundé expel Savannah's employees from its territory - as Chad did in mid-December. Boy also put pressure on Cameroon to ensure that Savannah was kept out of COTCO.

A history of prevarication

The Chadian president has since he came to power two years ago been trying to meet his Cameroonian counterpart Paul Biya, but in vain. Déby was only able to discuss the Savannah issue with Biya at a summit of the Central African Economic and Monetary Community (CEMAC) on 17 March in Yaoundé.

During the meeting, Biya pretended not to be informed of the situation, leaving it to SNH officials to discuss the matter with Chadian Oil Minister Djerassem Le Bemadjiel. The Chadian minister stayed in Cameroon for five days but left without any guarantee of support from Cameroon for Chad's plans to nationalise assets sold by Exxon to Savannah.

Chad's past attitude on this issue has left its mark in Yaoundé. When state-owned Société des Hydrocarbures du Tchad (SHT) in 2014 bought Chevron's 25% stake in the Doba fields, and thus the same share in COTCO and TOTCO, Yaoundé demanded that SHT cede part of it to Cameroon.

I would say similar to how we have given 10% from Cotco to Cameroon and reduced our holding to 30%, we should give 10% of doba oil field to chad and reduce our field interest to 30% as well see if they bite our hand ? I can't imagine them wanting to take this to ICC as well as they have played this play book before and they lost so clearly they have an end game here or perhaps there isn't one and they want this to drag on.

we are all assuming that the south sudan oil conference is going to play a part in terms of timing of our announcement and re-listing but it could have no bearing at all

Zengas - it wouldn't surprise me if they ask for an extension on suspension over 6 months. I think will highly likely take longer with all that's going on

Looks like a cease fire for 72 hours and negotiations led by US hopefully brings a sensible end to the fighting and a sense of normality

https://www.state.gov/announcement-of-nationwide-ceasefire-in-sudan/

Perhaps we purposely got Cameroon involved as it is biggest cemac country which may have the political will to influence chad to swing in our favour before the ICC decision ?

Interesting to see how this plays out could SNH back out of the 10% deal of acquiring cotco, or have we used Cameroon to strong arm chad into accepting savannah acquisition in doba fields, or does this escalate into full blown fiasco between the 2 countries ?

Unless there is a last minute change, EcoMatin has learned from well-introduced sources that Mahamat Idriss Deby, head of the Chadian transition, is expected to stay in the Cameroonian political capital, Yaoundé, in the coming days. The subject of the meeting with Cameroonian President Paul Biya would undoubtedly be the Savannah Energy affair, which is now turning into a diplomatic crisis between the two neighboring countries.

According to the same sources, it is hoped that a consensus will be found between the two personalities in the context of this file which undermines the relations of cooperation between the two States. The announcement of the Chadian President's visit to Cameroon also coincides with the holding of the Board of Directors and the General Assembly of Cameroon Oil Transportation Company (Cotco), on April 25, 2023, with a view to discussions on matters of great importance to society.

A disputed board of directors

Chad is firmly opposed to the holding of Cotco meetings. In a correspondence from Djerassem Le Bemadjiel, the Minister of Hydrocarbons and Energy of Chad, the latter requests the postponement of these two events. According to some sources, Ndjamena would first like to be informed about the transaction that took place on April 19, 2023, between Savannah Midstream Investment Limited (Smil), a subsidiary of the Savannah Energy group, and SNH. Transaction at the end of which, the Cameroonian company (SNH) bought 10% of the share capital of the British company, for an amount estimated at approximately 26 billion FCFA.

It should be noted that the source of this unprecedented diplomatic quarrel in the sub-region is the management of certain assets of the Chad-Cameroon pipeline, sources of "unfriendly actions contrary to the interests of Chad" on the part of Cameroonian representatives in the councils of administration of Cameroon Oil Transportation Company (Cotco) and Tchad Oil Transportation Company (Totco), denounced the Chadian presidency in a statement dated April 20. Chad also recalled last week its ambassador to Yaoundé, Djidda Moussa Outman, appointed barely a month ago.

As a reminder, this crisis occurs only one month after the holding in Yaoundé of the last session of the Conference of Heads of State of CEMAC, on the sidelines of which General Mahamat Idriss Déby Itno displayed a smile at Paul Biya whom he considers like a father. Yaoundé has still not reacted officially since the outbreak of this crisis. It therefore becomes more than necessary for the two heads of state to find common ground in order to avoid another diplomatic escalation.

Makes sense Zengas and as I result I would like to think that they would release the admission document and re-list within the next 2 weeks if they wanted to squeeze in a GM ahead of the conference but let's see how it plays out

Zengas - Couldn't agree more the value of this acquisition is a gamechanger, do you have and inclination of when we are likely to receive the admission document, obviously i know your guess is as good as anybody but still would love to hear your thoughts on whether you think it will be pre or post the conference ?

On another note does anyone think if we are to proceed with the transaction that we would get GM approval as a formality or will the situation in sudan create some nervousness with it being the only export route for shareholders to approve the deal ?

Looks like I got my admission timeline horribly wrong, I personally thought that we would have admission document and relisting by now to allow 4 or 5 weeks to approve the South Sudan deal through a GM followed by the South Sudan oil conference on 14th June but would surprise me now if we don’t get admission document and re-listing prior to oil conference on 14th June

Agreed Zengas, it shows the importance of the south sudan deal coming through as that could be the catalyst for the company in so many direction. South Sudan has the ability to triple our current production and quadruple our 2p reserves, plus the free cash flow can help us either acquire more hydrocarbon assets or bring renewable projects quicker to market

Certainly a commitment by our chair at suspended price should hopefully alleviate concerns of many that the share price has now been undermined at our suspended price by a vote of confidence and financial commitment by our chair. Question now is if South Sudan goes ahead what will we re-list as I will be conservative and say we will come back between 35-40p and personally feel that the share price will gradually price the deal over weeks and months post admission and completion, don’t think we will see the multiples straight away obviously peer comparison and metrics are there and will make us still grossly undervalued. Those are just my thoughts obviously like any investor I would like the lofty sp but just keeping my expections tampered

Wouldn’t surprise me if the new chair has additional contacts in the region which could see us being front runners for a few additional hydrocarbon carbon deals. I fully believe in the next 24 -36 months we could be producing well over 150,000 Bopd and with 2p reserves in the region of 1 billion, with significant reduction in net debt. It’s not a strategy for the fair hearted but if it comes through that you would be looking at savannah closer in the region of £2 by that point hopefully we have one of our renewable project operational to start to enjoy first revenues from our renewables division.

Mr B - I wouldn’t mind more hydrocarbon acquisitions although they need to deliver one fully let’s hope it is South Sudan once we get one fully complete with ministerial approval, than shareholders wouldn’t mind more as long as we avoid suspensions. Talking about more is fine but only once land South Sudan fully. Otherwise it starts to overlap and you don’t want to bite more than you can chew. I am would love more hydrocarbon acquisitions to ad I believe they provide most immediate impact to sp

Flurry of news this week could we be coming out of hibernation with the admission document ready shortly at this rate we could see it next week