Savannah Energy PLC, a British independent energy company, recently signed a Share Purchase Agreement with Cameroon’s Société Nationale Des Hydrocarbures (SNH) for the sale of 10% of the issued share capital in Cameroon Oil Transportation Company S.A. (COTCo). The transaction will result in Savannah’s subsidiary, Savannah Midstream Investment Limited (SMIL), reducing its shareholding in COTCo from 41.06% to 31.06%.
COTCo operates the 903km Cameroon section of the Chad-Cameroon export pipeline, which is the only international export route for oil production in Chad. In 2022, the pipeline transported an average of 124 Kbopd of crude oil valued at an estimated US$4.6bn at prevailing Brent crude oil prices.
As part of the sale agreement, SNH will pay a cash consideration of US$44.9 million to SMIL, which will be used to repay some of Savannah’s existing debt facilities. The transfer of shares is expected to occur in the second half of 2023 after certain conditions related to amendments to the bylaws of COTCo are satisfied.
This move highlights Savannah Energy’s focus on delivering “Projects that Matter” in Africa. The company operates gas and oil assets in several African countries, including Nigeria, Niger, and Cameroon, and is committed to working with national oil companies and supporting local communities.
The sale of shares in COTCo to SNH will also help Savannah Energy to reduce its debt facilities, aligning with its financial strategy of maintaining a strong balance sheet and increasing shareholder value. In addition, the transaction is expected to improve the company’s financial position while allowing it to continue pursuing its commitment to delivering projects that matter.
SNH and SMIL have pledged their support to each other as shareholders in COTCo. It, therefore, indicates their commitment to working collaboratively towards the success of the pipeline’s operations.
