The British company Savannah Energy and the American Exxon Mobil caused a diplomatic crisis between Chad and Cameroon, due to a controversial acquisition deal between the companies and officials of the two countries.
And the Chadian government announced the recall of its ambassador to Cameroon, claiming that officials from the neighboring country interfered in its internal affairs, according to the specialized website Energy Voice.
The Secretary-General of the Presidency of the Republic in Chad, Ghali Ngoth Jatta, accused personalities from Cameroon – whom he did not specify – of flocking to the Savannah Energy company, which is currently involved in a dispute with his country, according to what was monitored by the specialized energy platform.
Why are relations strained?
The move to withdraw the ambassador came after the Cameroonian National Oil and Gas Company “SNH” announced a deal with Savannah Energy to buy 10% of the oil export pipeline extending from Chad to Cameroon.
The two companies signed an agreement on April 20, 2023, to transfer this stake in Cameron Oil Transportation for $44.9 million, prompting the government of Chad to send an official written objection on the same day.
Chad protested, in the letter of objection, that this deal contradicts the founding and organizing agreements of the “Cameron Oil Transportation” company (COTCO), which owns the oil export pipeline extending between the two countries.
Pipeline control
Cameroon has been seeking for years to increase its share in the pipeline, with the aim of tightening control over it, and the British company Savannah Energy is seeking the same goal, which has angered officials in Chad.
In 2021, the British company Savannah Energy offered to buy 21% of the stake of the Cameroonian National Oil and Gas Company “SNH” in the pipeline for $ 275 million.
In 2022, the Cameroonian government attempted to conduct negotiations with Chad to increase its share in the pipeline, through visits by high-level official delegations in April and November 2022.
The first delegation was headed by then-Deputy Prime Minister of Cameroon Amadou Ali, while the second delegation was led by Deputy Secretary-General of the Presidency Paul Ilong Che, but the two delegations did not succeed in seizing a larger share of the pipeline, according to the specialized energy platform.
Nationalization of ExxonMobil assets
Relations between the two countries’ governments were strained after the American company, Exxon Mobil, a shareholder in the pipeline, announced the sale of its assets in Chad and Cameroon to the British company Savannah Energy in December 2022, for $407 million.
Chad objected to this deal in a strict manner, by nationalizing the assets of ExxonMobil in the country on March 23, 2023, which contributed to fueling the conflict with major international oil and gas companies.
The nationalization decision stipulated the confiscation of all assets, concession rights and exploration licenses granted to Esso Exploration and Production Chad, a subsidiary of the American Exxon Mobil Corporation.
The Chadian government protested against this deal, as its final terms violate contractual obligations with the US company ExxonMobil, according to what was monitored by the specialized energy platform.
The government confirmed that it had taken measures to guarantee all its interests, including resorting to international courts, to stop the sale and transfer of shares between the American and British companies.
Exxon Mobil owns 40% of the oil export pipeline between Chad and Cameroon, in addition to 40% of the Doba oil project in Chad, which has a production capacity of approximately 28 thousand barrels per day.
The dilemma of the landlocked country
The aforementioned oil pipeline extends over 1,000 kilometers between Chad and Cameroon, and it is a very vital line for a geographically landlocked country like Chad, as it uses the pipeline to transport its crude oil to the coast of the Gulf of Guinea and from there to European and other markets.
The oil countries – which do not overlook the coasts – suffer from the dilemma of traffic, which forces them to use the lands and coasts of others, to export their products abroad, as well as import their needs, which makes them in a situation almost dependent on the transit country.
It is not only Chad that suffers from the dilemma of the landlocked country in Africa, but 14 other African countries share the same fate, most notably: Burkina Faso, Ethiopia, Mali, Niger, Rwanda, South Sudan, Uganda, Zambia, Zimbabwe … and other countries, according to what it monitored. specialized power platform.
For this reason, Chad fears an increase in the control of external parties on a pipeline that is very vital to it, and is trying to negotiate with companies wishing to exit to buy their shares instead of others.
Petronas is letting Savannah down
The British company Savannah Energy tried to acquire the shares of the Malaysian Petronas company in Chad last year (2022), but it did not succeed due to the Malaysian company’s preference to sell to Chadian parties in the end.
Chad tried to obtain the approval of the Cameroonian parties to complete the purchase deal from Malaysian Petronas, but it was ignored, according to a presidential objection letter sent to Cameroon on April 20, 2023.
The Secretary-General of the Presidency of the Republic in Chad, Ghali Ngoth Jatta, said that his country will defend the interests of its people once again, accusing officials in Cameroon of undermining the relationship between the two countries.
The British company Savannah Energy seeks to enhance cooperation with Cameroon in various fields, amid the turmoil of its interests in the neighboring country of Chad.
Last week, Savannah Energy signed an agreement to build a hydroelectric project in northern Cameroon with a capacity of 75 megawatts.
Chad unrest
It is noteworthy that Chad has been witnessing political and military unrest for years, due to its fight against armed rebel groups in the north of the country, according to what was monitored by the specialized energy platform.
Chadian President Idriss Deby died in April 2021, due to deep wounds he sustained during his field participation in the fight against the rebels, which is unusual for presidents and leaders of countries.
The army announced the dissolution of parliament and the government and the formation of a transitional military council that includes 15 members to run the country after the death of the president, for a period of 18 months, after which power will be handed over to an elected government.
On October 8, 2023, the president’s son, Major General Mohamed Idriss Deby, 37, announced the dissolution of the military council and installed himself as the country’s interim president.
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