Savannah Sells Stake in Chad-Cameroon Pipeline - Africa’s premier report on the oil, gas and energy landscape.

Savannah Sells Stake in Chad-Cameroon Pipeline

Savannah Energy Plc has sold a quarter of its 41% stake in Cameroon Oil Transportation Company S.A. (COTCo).

The British junior reports that its wholly owned subsidiary, 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).

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 250,000Barrels Per Day (BPD) nameplate capacity and is the only international export route for oil production in Chad. “During 2022, COTCo transported an average of 124,000BPD of crude oil valued at an estimated $4.6bBillon at the prevailing Brent crude oil prices”, Savannah declares in a press statement.

“In consideration for the sale of the Shares, SNH will pay a cash consideration of $44.9Million to SMIL”. Savnnah says in a release. 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.”

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