Home » Chad Oil and Gas: Investors Worry For Inability Of Savannah Energy To Play Within The Rules

Chad Oil and Gas: Investors Worry For Inability Of Savannah Energy To Play Within The Rules

by Newstimesafrica
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With the opening and exploration activities going on in the Republic of Chad,   there has been on going corporate battle and challenge between industry stakeholders, especially Savannah Energy Plc. It has been reported that Savannah Energy Plc has been  unable to progress her publicised acquisition of ExxonMobil and PETRONAS’ assets in Chad but has failed to disclose this development to the market. The industry Stakeholders and  analysts insist the non-disclosure of the material information the company has kept these past months can be said to be deliberate and interpreted in some quarters as fraudulent.

It has been gathered by some reliable quarters that Savannah Energy had indicated interest in the acquisition at a time other Oil and Gas companies were also gunning for the deal.The Government of Chad, through the state-owned oil company, Societé des Hydrocarbures du Tchad (SHT), notified PETRONAS on January 18th, 2022 of her decision to exercise her right of first refusal and to carry out the operation in place of Savannah Energy.

Consequently, SHT is in the process of acquiring control of substantial shareholding in ExxonMobil and PETRONAS. SHT is currently in discussion with PETRONAS concerning the adaptations to be made to the transfer agreement to reflect the substitution of SHT for Savannah Energy, as buyer. SHT is also in the process of taking the necessary steps to raise the financing for the operation. While this has been going on, Savannah Energy has remained silent, a clearly unethical act that is wilfully downplaying the potential impact the collapse of the deal might have on investors who have made significant decisions based on the announcement made by Savannah Energy in December, 2021.

We must note that , Under article 12 of the association agreement, the members of the consortium have a right of first refusal for 30 days in the event of transfer by another member of its participation in the consortium, in order to carry out the concerned operation (which leads to the transfer of the stake concerned) in place of the initially planned buyer, under the same conditions as those agreed between the parties. It isa noted that after months of negotiations and site visits, the British firm and London Stock Exchange listed company announced the execution of share purchase agreements (SPAs) worth $626m with ExxonMobil and PETRONAS to acquire their oil & gas assets in Cameroon and Chad in December, 2021.

As a result of both acquisitions, Savannah Energy was to acquire 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.

Allegedly,  Savannah Energy  has been accused by  some industry watchers of acting unethically in several markets, especially in Africa. As the African energy space is developing and many Nigerian oil majors are diversifying and expanding into other African countries to create a footprint in their energy ecosystem, it is advised that industry players must act accordingly and in tandem with the rules of the game, Savannah Energy inclusive.

 

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