By Christophe Atangana Ndende, Exploration Manager, Rapporteur of the Standing Commission of Negotiations of Petroleum Contracts – National Hydrocarbons Corporation (SNH) – Yaoundé, Cameroon.

1. What assets do you put forward to attract investors regarding the eight free blocks promoted by Cameroon?

Thinkings and brainstormings on new ideas and incentives to better valorize and attract investors in Cameroon’s oil and gas upstream domain have been constant and in perpetual readjustment according to the context, for several years now. It was recently marked by the promulgation on 25 April 2019 by the Head of State of the Petroleum Code Law, which replaces that of 1999.

This law of 2019 has the great particularity that it contains a number of incentives very favourable to any investor, including the reduction to 35% of the corporate tax rate which was initially at 40%, the cancellation of the tax on profits and dividends, the cancellation of a direct tax on income from oil operations, the cancellation of the value-added tax (VAT) on the supply of all kinds of goods and services, including studies directly related to the conduct of oil operations, the cancellation of the Special Tax on Petroleum Products (STPP) or similar taxes on the supply of all kinds of goods and services, including studies directly related to oil operations, the reduction of computer service fees from 0.50% to 0.45%, with a maximum of FCFA 100,000 (approximately USD 50) per declaration.

It should be noted that in addition to these main incentives, one or more specific incentives may be granted to an investor after negotiations: the exemption of the signature bonus, the exemption of the payment of the corporation tax over a maximum period of five (05) years for liquid hydrocarbons and seven (07) years for gaseous hydrocarbons, with regard to the amount of the investments to be carried out and the duration of the production plateau attached to the submitted investment programme, the adjustment of the economic parameters, with in particular – (i) the possibility of a downward revision of the participation of the State in the exploitation – (ii) the modification of the “Profit Oil” and/or “Cost Oil” as regards the Production Sharing Contracts, and – (iii) the downward revision of the royalty rate proportional to production as regards the Concession Contracts, the possibility of recovering, from any production from a given exploitation perimeter, seismic acquisition and dry exploration drilling expenses incurred on any other contractual perimeter in which the applicant carries out its operations, and the fiscal consolidation of research expenses.

Another attractive asset is the work we undertook a few years ago on improving the quality of the seismic data from the Douala/Kribi-Campo basin, which has been reprocessed by Depth Migration to give a better view of the subsurface architecture. In addition to the improved seismic data from the Douala/Kribi-Campo Basin, new geological and geophysical studies have been carried out with new interpretation technology tools, allowing for the maturation of identified prospects and mitigation of associated risks.

An equally important asset is the availability of a safety system that allows any oil operation to be carried out with complete peace of mind.

2. Does the revised Petroleum Code in 2019 allow Cameroon to be as competitive as desired?

We really think that this new regulatory framework, which has many advantages for investors, allows us to be competitive as we wish. Our sedimentary basins have not yet delivered their full potential.

The shallow deltaic reservoirs in the Rio Del Rey Basin have been in operation for several years. On the other hand, the deep turbiditic reservoirs, through which very few wells have been drilled, with some of which have discovered gas and condensates, remain under-explored. The same is true of the Douala/Kribi-Campo basin, which has not yet undergone in-depth exploration.

In addition, as part of a partnership with CGG, which has enabled the reprocessing of wells and seismics data from the national oil and gas domain, the mapping of our subsoil has been improved and interesting new leads and prospects have been brought to light, thus adding competitiveness to our sedimentary basins.

3. Why was it important for you to be represented as a Bronze sponsor at CAPE?

The National Hydrocarbons Corporation (SNH) has been active within the African Petroleum Producers’ Organisation (APPO) since its creation in 1987, Cameroon being one of the founding members of this association initially called APPA. It was but natural for us to support this flagship event, which gives substance to the vision of APPO. We fully adhere to and support this vision.

Indeed, the African Petroleum Congress and Exhibition (CAPE) provides an opportunity to strengthen collaboration and partnerships between different structures of APPO member countries, especially in the exploration, production and development of hydrocarbons, which are the core of our activity. CAPE is therefore a real catalyst for improving energy security and economic diversification in Africa through sharing of experience and know-how, as is SNH a catalyst for development in Cameroon through many oil and gas projects it is carrying out.

4. What was the key outcome for SNH of participating in CAPE VIII?

At CAPE VIII, SNH was able to highlight the opportunities of Cameroon’s hydrocarbon sector, including the promotion of eight free blocks in producing basins. We were also able to present the investment incentives provided by our legislation and various other benefits.

Beyond this promotional aspect, we were able to share our innovative and positive experience in natural gas liquefaction or energy production from this resource for the benefit of industries and households. These useful experiences can be applied in other APPO member countries. In this giving and receiving meeting that makes up the CAPE, we have also drawn useful information on the activities carried out by other oil companies, for example on improvement of E&P data, through a partnership concluded by SNH with CGG UK.