Cameroon’s SNH Writes Down CFA10.8 Billion on Stalled Cotco Stake Purchase

Cameroon’s National Hydrocarbons Corporation, known as SNH, has begun recognizing the financial risk tied to its still-unfinished acquisition of a 10% stake in the Cameroon Oil Transportation Company, or Cotco.

In its 2025 financial statements, the state-owned company recorded a CFA10.765 billion impairment on a CFA26.9 billion receivable corresponding to the amount paid for the transaction.

According to the auditor’s report, the impairment represents 40% of the amount committed to Savannah Midstream Investment Limited, a subsidiary of Savannah Energy, under an agreement signed on April 19, 2023.

The CFA26.9 billion represents the funds paid by SNH to acquire the shares. Nearly three years after the agreement was signed, however, the final transfer of the stake has yet to be completed.

The amount now appears in SNH’s accounts as an “other receivable,” subject to a partial impairment. This does not mean the money is considered permanently lost. It does, however, reflect greater uncertainty over the receivable’s value and the conditions under which the transaction could be completed or the funds recovered.

A Deal Born From the Chad-Savannah Energy Dispute

The impaired receivable stems from the struggle over ownership of the Chad-Cameroon pipeline after Savannah Energy announced in December 2022 that it had acquired ExxonMobil’s assets in Chad and Cameroon.

The transaction included ExxonMobil’s 40% stake in Esso Exploration and Production Chad Inc., which operates the Doba oil fields, as well as the U.S. group’s holdings in Tchad Oil Transportation Company, or Totco, which manages the Chadian section of the pipeline, and Cotco, which operates the Cameroonian section.

Chad immediately challenged the transaction, arguing that it violated the agreements governing the Doba oil consortium. Chadian authorities refused to recognize Savannah Energy as the new shareholder in the project companies before nationalizing the assets concerned.

Against that backdrop, SNH signed an agreement with SMIL on April 19, 2023, to acquire 10% of Cotco for $44.9 million, equivalent to about CFA26.9 billion.

The deal was expected to raise SNH’s direct stake in Cotco from 5.17% to 15.17% and strengthen Cameroon’s influence over the infrastructure linking the Doba oil fields to the Kribi marine terminal.

The agreement quickly drew opposition from Chadian authorities, which viewed it as implicit recognition of Savannah Energy’s rights over assets whose ownership they disputed. The disagreement prompted Chad to recall its ambassador to Cameroon for consultations in April 2023, opening a diplomatic crisis between the two countries.

Political Compromises Fail to Unblock the Transaction

Diplomatic tensions later eased through negotiations between Yaoundé and N’Djamena. Chad maintained that Savannah Energy could no longer hold a stake in Cotco because the British company was no longer part of the consortium operating the Doba fields.

The two countries then agreed on a shared management structure for the pipeline. Under the arrangement backed by the Cameroonian and Chadian authorities, the transfer of a 20% stake to the Cameroonian side was expected to raise its ownership in Cotco to 25.17%, from 5.17%.

N’Djamena, meanwhile, retained a majority position through state-owned entities including SHT Overseas Petroleum and Tchad Petroleum Company.

The reorganization did not resolve the status of the shares claimed by Savannah Energy. As a result, SNH’s agreement to acquire 10% of Cotco remained in limbo.

The impasse is now being recognized as a financial risk. By impairing 40% of the receivable, SNH is acknowledging that part of the amount paid may have lost value, while stopping short of treating the full CFA26.9 billion as unrecoverable.

Several Options to Recover the Funds

The case may not necessarily end with a straightforward refund. The transaction could still be completed if the legal and shareholder obstacles are removed.

The parties could also agree on a full or partial repayment, compensation, or a negotiated settlement as part of the broader disputes over Savannah Energy’s assets in Chad.

For now, SNH remains exposed on the funds it advanced. The CFA10.765 billion impairment is the first accounting sign of the uncertainty surrounding a deal that was presented in 2023 as a way to expand Cameroon’s role in a strategic oil infrastructure asset.

Nearly 40% of the receivable is now considered exposed to a potential loss in value in SNH’s 2025 accounts. The outcome will depend on whether the parties can secure either the effective transfer of the shares or the recovery of the funds already paid.

Amina Malloum