Tuesday, 26 June 2012

Cameroon awards first oil licence on Bakassi


On 15 June, the government-managed National Hydrocarbons Corporation (SNH) awarded its first petroleum exploration contract on the previously contested Bakassi peninsula. The production-sharing contract for Bakassi West was awarded to a consortium led by Dana Petroleum (a subsidiary of the Korean National Oil Company), which heads a consortium of four firms.

The four-year agreement, worth US$31 million and could be extended by a further two-year period to increase to the tune of US$71 million, will be operated by Dana, with equity interests held by Canada's Madison Petrogas and Cameroon's Soft Oil & Gas Ltd.

The ceremony was overseen by Cameroon's Minister of Mines, Industry and Technological Development Emmanuel Bonde, while the accord was signed for Cameroon by the Executive Manager of SNH Adolphe Moudiki and Dana's country manager John William Downey.

The contract authorises the consortium to acquire, process and interpret seismic 2D data and the drilling of two exploration wells.

Thought to be rich in oil, Bakassi was under Nigerian control for at least 15 years until 2008, when the peninsula was returned to Cameroon following an October 2002 ruling by the International Court of Justice. Although Nigeria has accepted the ruling, the area has faced pockets of resistance from armed splinter groups undermining Cameroon's authority there.

The groups have severally captured Cameroon troops and foreigners operating in Bakassi, urging Cameroon and governments of the captives to pay ransom. In 2010, Cameroon fortified the area with the anti-terrorist Rapid Intervention Battalion, causing a reduction in the groups' activities. Operating under the moniker Bakassi Freedom Fighters (BFF), the groups have not been entirely deterred, however, and made their last attack in October 2011, killing two Cameroonian soldiers.

For more news and expert analysis about Cameroo, please see Cameroon Politics & Security.

© 2012 Menas Associates

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