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Victoria Oil And Bowleven Note Gas Sales Agreement At Etinde, Cameroon

(Alliance News) – Shares in Victoria Oil & Gas PLC slumped on Wednesday after it said that it has signed a gas sales

deal with the owners of the Etinde natural gas and condensate field in Cameroon, but also reported mixed fourth-quarter sales and production from Logbaba.

Victoria Oil shares were 19% lower at 5.95 pence each in London on Wednesday afternoon.

Victoria said its subsidiary Gaz du Cameroun SA signed an agreement with New Age Cameroon Offshore Petroleum SA for the supply of a minimum of 25 million standard cubic feet of processed gas from Etinde.

BowLeven PLC, which also owns a stake in Etinde, noted the announcement. Its stock was 3.8% higher at 6.02 pence each in London on Wednesday morning.

The agreement is projected to last for a period of 20 years. After three years, a minimum of 30 million standard cubic feet would then be supplied, “with the potential to increase in the future as demand in the market increases”.

Victoria Oil said: “This would amount to a total gas supply in excess of 200 billion cubic feet of gas over the contract period. GDC would then seek to distribute this gas to new independent power producers looking to produce power for the energy deficient Douala market as well as to existing and future thermal and retail power customers.”

In the fourth quarter of 2019, condensate sales attributable to Victoria Oil’s GDC in Logbaba fell 25% quarter-on-quarter to 2,294 barrels from 3,071.

Year-on-year, sales rose 11% from 2,701 barrels.

Production was 43% lower quarter-on-quarter to 244 million standard cubic feet from 429 million. Annually however, it climbed 6.1% from 230 million standard cubic feet.

Sales suffered during the quarter as a result of Altaaqa Global Energy Service, a generator supplier to ENEO Cameron SA, suspended operations at Logbaba in September following non-payment by ENEO.

Victoria Oil said: “Consequently, GDC has not provided gas to ENEO since that date, but has continued to invoice ENEO based on take-or-pay provisions agreed to in the binding term sheet and therefore projected revenue from gas sales is not expected to be affected in 2019.”

Elsewhere, Victoria Oil is locked in a dispute with Cameroon Holdings after Victoria Oil last January stopped making payments that were part of a royalty agreement.

In June, Cameroon Holdings opened up proceedings against Victoria Oil, believing it should be entitled to payments.

“The company has vigorously defended such claim and litigation is ongoing. There is no definitive timetable for such litigation proceedings,” Victoria Oil said on Wednesday.

By Eric Cunha; ericcunha@alliancenews.com

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