NOT AN OFFICIAL UNCTAD RECORD. OUTLINE Overview of the Petroleum sector in Cameroon –Situation of Cameroon –Current actors –Some statistics: Exploration.

SATISFYING ENERGY NEEDS SATISFYING ENERGY NEEDS WITH NATURAL GAS FROM A WITH NATURAL GAS FROM A SUBREGIONAL PERSPECTIVE: SUBREGIONAL PERSPECTIVE:

THE THE CAMEROON’S CASECAMEROON’S CASE

NOT AN OFFICIAL UNCTAD RECORD

OUTLINEOUTLINE

• Overview of the Petroleum sector in Cameroon– Situation of Cameroon– Current actors– Some statistics: Exploration and Production

• Situation of the Energy Sector in Cameroon• Cameroon’s Natural Gas Sector Overview

– Natural gas resource base– Institutional framework– Natural Gas Master Plan

• Gas Development Opportunities– Local markets– Subregional markets

• Conclusion

SITUATION OF CAMEROON SITUATION OF CAMEROON IN AFRICAIN AFRICA

• Cameroon is situated in the arm-pit of Africa in

the Central African Region

• Population of about 16 million people.

• Surface area of 475000sq.km

• Modest oil producer: 95000bls/day

• No major discovery as yet

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PRODUCTION STATISTICSPRODUCTION STATISTICS1977-20081977-2008

SITUATION OF THE ENERGY SITUATION OF THE ENERGY SECTOR IN CAMEROONSECTOR IN CAMEROON

• Population: 16 million people.• Economic growth: 5% • Population growth: 3% • Per capital income: 700 USD • Inflation index: 3%

Location Map

SITUATION OF THE ENERGY SITUATION OF THE ENERGY SECTOR IN SECTOR IN CAMEROONCAMEROON

• Access to conventional energy: less than 10 % of Population

• Main fuels used: Wood & Kerosene (cheapness, affordability and accessibility)

• 675 000 tonnes/year of wood consummed

• Electricity: 90% Hydro and 10% thermal

• Present demand: 500 MW

• Expected to double within 10 years

EVOLUTION OF THE DEMAND AND SUPPLY EVOLUTION OF THE DEMAND AND SUPPLY OF ELECTRICITYOF ELECTRICITY

SITUATION OF THE ENERGY SITUATION OF THE ENERGY SECTOR IN SECTOR IN CAMEROONCAMEROON

• Government Policy today : Diversify energy sources to meet the growth rate

• Priority is focused on gas

Clean energy source

Existence of enough reserves to satisfy local market

Protection of environment

Halt deforestation

• RESOURCE BASE• INSTITUTIONAL FRAMEWORK

-THE PETROLEUM CODE

-THE GAS CODE• THE NATIONAL GAS PLAN• GAS DEVELOPMENT OPPORTUNITIES

NATURAL GAS SECTOR OVERVIEWNATURAL GAS SECTOR OVERVIEW

RESOURCE BASERESOURCE BASE

• Cameroon is underexplored in terms of natural gas

• Total discovered recoverable Non-Associated natural Gas : 5.5 TCF

• Risked upside estimated volumes : 20 TCF

• Current discovered gas by accident from oil exploration

• Discovered gas rich in heavy components and located close to main energy centers in Douala and Limbe

RESOURCE BASERESOURCE BASE

• Reserves are substantial for local market but not sufficient enough for classical export schemes

• Privatisation of the electricity sector and the present economic growth have warranted the promotion of gas-to- electricity projects

• The emergence of subregional markets is an incentive to development of natural gas projects

INSTITUTIONAL FRAMEWORKINSTITUTIONAL FRAMEWORK

• Prior to the promulgation of the Petroleum Code in December 1999, no legal framework for Gas Development

• The Petroleum Code regulates the Upstream sector and provides incentives for gas exploration and development

INCENTIVESINCENTIVES

• Possibility of extension of the exploration period for appraisal of the gas discoveries and the search for market outlets

• Tax holidays for cost recovery for development and exploitation of natural Gas

• No custom duties for gas development and exploitation activities

• Possibility to negociate economically viable terms for Gas development projects

THE GAS CODETHE GAS CODE

• Promulgated to Law on December 30, 2002

• Enabling Act published on September 4, 2003

• Regulates the Downstream sector for gas development projects

• Legal framework condusive to the development of Gas resources

THE GAS CODETHE GAS CODE

• Sets an attractive environment for Private National and Foreign investors in the Gas sector

• Lays down principles governing regulation of the sector

• Guarantee safety of facilities and environmental protection

Gas Regulator• To enforce the provisions of the Gas Code and its

enabling acts; • To ensure the protection of the rights of customers;• To manage the selection process for concessions,

licences and authorizations;• To ensure application of norms, security and

environment protection;• To monitor compliance with competition and play the

role of alternative dispute resolution authority.

THE GAS CODETHE GAS CODE

Incentives

• Tax write-off for ten (10) years

• Guaranteed convertibility of currency

• No Government subsidies

• Off-and on-shore US dollars accounts

• Freedom to transfer funds

• Exemption of custom duties for imported project goods/equipment.

THE GAS CODETHE GAS CODE

• Define an optimum natural gas development from all known reserves both Associated and Non-Associated

• Centralise coordination of natural Gas development

• Get maximum economic benefits through a prudent step by step approach to gas development

• Define a long term national gas development strategy

THE NATIONAL GAS PLANTHE NATIONAL GAS PLAN

Objectives

HUB

Usine de GNLOnshore

Jabane/Ifiari(144)

144

Afaga(128)

151

131

131

76

20

314

Narendi/Idaboto(131)

Edem(32)

Kita(114 Kita Gas 314

Design)Ekundu Nth

(56)

Ekundu Sth(20)

Sanaga Sud(234 Sanaga Sud Gas 260 Design)

Kribi L(88) Kribi B

(76)

Ile de Bioko

Plate-formes puits

Plate-formes production

Débit de gaz en MMSPC/J

Gaz sec

- SONARA- Centrale thermique de Limbé

GPL(50 000 t/an)

Condensats(3 000 bbb/j)

16476

260

36040

Centrale thermique de Kribi

Possible configuration of Gas development infrastructure from known resource base

Creation of gas gathering system

Gas Development opportunities

Gas-to-electricity

• Kribi gas to electricity plant to go operational by the end of 2007

• Capacity of 150 MW and expected to grow to 300 MW

• PSC on Sanaga Sud field signed in March 2006 with Perenco Cameroon

• Gas sales contract to be signed in June 2006 with AES SONEL

Gas Development opportunitiesGas Development opportunities

Conversion of Limbe Power Plant and SONARA refinery to function with natural gas.

HUB

Gaz sec

- SONARA- Centrale thermique de Limbé

GPL(50 000 t/an)

Condensats(3 000 bbb/j)

Gas Development opportunitiesGas Development opportunities

Extraction of LPG for local and

subregional markets

Production of 50 000 tons/year

envisaged

Feasibility study on 4 000 m3

storage capacity at Douala is ongoing

HUB

Gaz sec

- SONARA- Centrale thermique de

Limbé

GPL(50 000 t/an)

Condensats(3 000 bbb/j)

Gas Development opportunitiesGas Development opportunities

Valorisation of liquids extracted from wet gas is envisaged:

about 3 000 barils/day contemplated HUB

Gaz sec

- SONARA- Centrale thermique de

Limbé

GPL(50 000 t/an)

Condensats(3 000 bbb/j)

Gas Export scheme to LNG in Gas Export scheme to LNG in Equatorial GuineaEquatorial Guinea

• Protocol Agreement signed between SNH and SONAGAS on March 20, 2006 to study the implementation of the project

• The terms of the agreement provide for:

Joint study on the Technical, Economical and Legal aspects of the export project

Creation of a Steering Committee and Study groups

Study period: 15 weeks

Conclusion to be submitted to both Governments for ratification

Gas Export scheme to LNG in Equatorial Gas Export scheme to LNG in Equatorial GuineaGuinea

OBJECTIVESOBJECTIVES

• To determine volumes of Cameroon natural gas necessary to meet the needs of the LNG plant in Equatorial Guinea

• To determine gas requirements of the LNG plant in Equatorial Guinea

• To examine the Legislative and Regulatory framework applicable for construction of a pipeline for gas transport from Cameroon to Equatorial Guinea

• To identify financing sources

CONCLUSIONCONCLUSION

• Gas is no more a stranded asset in Cameroon

• Natural Gas exploration and development is now a reality especially considering the underexplored status of its basins

• The new institutional framework has asserted the governments proactiveness to create the conditions for gas development

• International cooperation among countries sharing common boundaries is a major incentive on gas development projects