After months of negotiations and site visits, Savannah Energy has announced the execution of share purchase agreements (SPAs) worth $626m with ExxonMobil and PETRONAS to acquire their oil & gas assets in Cameroon and Chad.
The deals will see the British independent gaining a combined 75% controlling interest in the Doba Oil Project and 70% indirect controlling interest in the Chad-Cameroon oil export transportation system. Chevron had previously sold its 25% interest in the Doba Oil Project and 21% interest in the pipeline system in 2014 to the Government of Chad for $1.3bn.
While negotiations with ExxonMobil had been announced earlier this year, the acquisition of PETRONAS’ interests in both countries was not expected. The transaction will see Savannah Energy expand its African portfolio, which already comprises upstream oil operations in Niger and upstream and midstream gas operations in Nigeria.
The ExxonMobil Acquisition – $360m
Savannah Energy is acquiring ExxonMobil’s entire upstream and midstream asset portfolio in Chad and Cameroon for $360m. The acquisition will be funded through a mixture of debt and equity/equity-linked financing and the SPA has an economic effective date of January 1st, 2021.
Concretely, Savannah Energy is acquiring a 40% interest and operatorship of the Doba Oil Project, an onshore oil business with a production of 33,700 barrels of oil per day (bopd) in 2020. It is also acquiring a 40% indirect interest in the Chad-Cameroon oil export transportation system, that comprises the 1,081km Chad-Cameroon oil pipeline and the Kome Kribi 1 floating, storage and offloading (FSO) vessel offshore Cameroon. Last year, the pipeline transportated an average of 129,200 bopd.
The facilities have been operating since 2003 and the pipeline remains the only evacuation route for Chad’s oil and is used by several operators. According to Hawilti’s research, the current list of pipeline beneficiaries include China National Petroleum Corporation International Chad, Cliveden, Royalty In Kind, Société des Hydrocarbures du Tchad (SHT), ExxonMobil, Petronas, Petro Chad Mangara, Glencore and Petroleum Chad Company Limited.
The PETRONAS Acquisition – $266m
Secondly, Savannah Energy is further consolidating its interest in the same assets by also acquiring PETRONAS’ entire upstream and midstream asset portfolio in Chad and Cameroon. The transaction is valued at $266m and the SPA also has an economic effective date of January 1st, 2021.
Under this second transaction, Savannah Energy is acquiring an additional 35% interest in the Doba Oil Project and an additional 30% indirect interest in the Chad-Cameroon oil export transportation system.
As a result of both acquisitions, Savannah Energy is acquiring a combined 75% controlling interest in the Doba Oil Project and 70% indirect controlling interest in the Chad-Cameroon oil export transportation system. The remaining interests are owned by the national oil companies of Chad and Cameroon.
Details on the Chad-Cameroon Petroleum Development and Pipeline Project are available in the “Projects” section within your Hawilti+ research terminal.