Savannah Midstream Investment (SMIL), Savannah Energy’s wholly owned subsidiary, has signed the sale purchase agreement (SPA) to sell shares representing 10% of the COTCo’s share capital to Cameroon’s national oil company, SNH
Savannah to sell stake in Cameroon pipeline project. (Credit: Aaron Jones on Unsplash)
British independent energy company Savannah Energy has agreed to divest its 10% stake in Cameroon Oil Transportation Company (COTCo) to Société Nationale Des Hydrocarbures (SNH).
Savannah Midstream Investment (SMIL), Savannah’s wholly owned subsidiary, has signed a sale purchase agreement (SPA) with SNH, Cameroon’s national oil company.
Under the terms of the agreement, SNH will pay SMIL a cash consideration of $44.9m in exchange for the sale of the shares representing 10% of COTCo’s share capital.
SNH and SMIL have agreed to support each other as shareholders in COTCo.
The transaction is expected to be completed in the second half of this year, subject to satisfaction of certain conditions related to amendments to the bylaws of COTCo.
Upon completion, the SMIL shareholding in COTCo will be reduced from 41.06% to 31.06%.
Savannah intends to use the proceeds from the transaction to partly repay its existing debt facilities.
COTCo owns and operates Cameroon’s portion of the 903km Chad-Cameroon export pipeline, the Kome Kribi 1 floating storage and offloading facility and other infrastructure.
The pipeline has 250 thousand barrels of oil per day (Kbopd) of nameplate capacity and is the only international export route for oil production in Chad, said Savannah Energy.
Last year, COTCo transported an average of 124Kbopd of crude oil, estimated to be worth around $4.6bn at the prevailing Brent crude oil prices.
In a separate development, Savannah Energy, through its wholly owned subsidiary Savannah Energy RCM, has signed a memorandum of agreement (MOA) with the Government of the Republic of Cameroon for the development of the Bini a Warak hydroelectric project.
Under the terms of the MOA, Savannah will extend the existing feasibility studies and work with power industry authorities and financial institutions to finalise the construction of the Bini Project.
Located in the northern Adamawa Region of Cameroon, the 75MW Bini Project is expected to provide clean, stable and affordable power to the country’s northern region.
The project development involves the construction of a dam on the Bini River, along with an 82km² reservoir, tunnels, powerhouses, substations, and a 225kV transmission line.
It is expected to be completed between 2027 and 2028 and will support existing local electricity demand and enable various energy-intensive industrial projects within the region.