April 21, 2024

ExxonMobil in another messy deal in Chad, despite assets’ sales stalemate in Nigeria


Oredola Adeola

Exxon Mobil has found itself in another fresh crisis in the Republic of Chad that may lead to another stalemate following the sale of its entire upstream and midstream assets in Chad and Cameroon to Savannah Energy Plc, a British independent energy company focused in Africa, without regulatory consent.

This is happening after the US major oil company at the weekend announced the sale of its assets to Savannah Energy company at the cost of $407 million.

Andrew Knott, Chief Executive Officer of Savannah Energy had in a statement during the weekend confirmed the acquisition of oil and gas supermajor ExxonMobil’s entire upstream and midstream asset portfolio in Chad and Cameroon.

However, the regulatory authority and the national oil company in the Republic of Chad are kicking against the deal between the two companies.

EnergyDay gathered that Savannah planned to use the acquisition of the new assets to expand its interest from Nigeria and Niger to Chad and Cameroon.

The Savannah CEO said that the Exxon deal included its 40 percent stake in Chad’s Doba oil project, which comprises seven producing oil fields located in Southern Chad, including the Miandoum, Bolobo, Kome, Moundouli, Nya, Maikeri, and Timbre producing fields.

The production rate of the Doba oil project was projected to reach up to 28,000 barrels per day (bpd) based on the available data for 2022.

The combined estimated reserve base of the seven producing fields in Chad is currently projected at 142.3 million barrels.

The African-focused British E&P company also acquired Exxon’s 40% indirect interest in the more than 1,000 kilometres (621 miles)  Chad-Cameroon export pipeline network connecting the Kome Kribi 1 Floating Production Storage and Offloading facility at the Atlantic Gulf of Guinea offshore Cameroon from where the product is exported.

The asset’s nameplate capacity is 250,000 bpd with an estimated throughput of 124,000 bpd, derived from over 15 fields, for 2022.

Knott while commenting on the assets said, “Our focus in Chad will immediately turn towards making the investments we believe the Doba Oil Project needs to significantly increase production volume from current levels and the advancement of our up to $500 million/500 MW of renewable power projects.

“We expect our investments in these projects to provide significantly increased tax revenues and electricity access for the people of Chad.

He further hinted that “We hope to see the Cameroon Oil Transformation Company and Chad Oil Transformation Company businesses grow further over the course of the coming years through additional third-party customer throughput volumes.

The Chadian Government is resisting the sales of the assets over pre-emptive rights, the same way that ExxonMobil’s assets sales in Nigeria are being contested.

The Ministry of Energy and Petroleum of Chad in a statement published on Monday via its official Facebook page said the Republic of Chad formally contests the operation between ExxonMobil and Savannah.

The statement said, “Doba’s oil operations and the Chad/Cameroon pipeline are vital and sovereign assets for Chad; they cannot be endangered by an irregular operation.”

The Government revealed that the sale of Exxon’s assets to Savannah also “flagrantly violates” Societe Des Hydrocarbures Du TCHAD (SHT), the national oil company’s rights to information and pre-emption under a consortium agreement that binds Exxon.

ExxonMobil has shown deep interest in disposing of its assets in West Africa including its operations in Chad, Cameroon Nigeria.

While the US energy multinational has completed the sales of the assets in Chad and Cameroon, its assets in Nigeria is also battling with regulatory hurdle with the Nigerian National Petroleum Company Limited(NNPCL) over the sale of its $1.28 billion of shares to Seplat Energy, despite Ministerial consent given to the acquisition by President Muhammadu Buhari.

The NNPC like the Chadian national oil company is also contesting the sales of assets over pre-emptive rights to the assets.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had also declined to approve the transfer of the assets by ExxonMobil to Seplat Energy.

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