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Actualités of Mardi, 12 Août 2014

Source: The Post Newspaper

Oil finds and production mafia in Cameroon

When the National Hydrocarbons Corporation (SNH) and the Chinese oil exploration/ exploitation company Yan Chang Logone Development Company S.A. announced the discovery of oil in the sedimentary basin of Logone-Birni of the Far North Region, the news did not make headlines in the national media. It did not interest the average Cameroonian either.

Reason: Cameroonians are wary of laconic announcements of oil finds which do not state quantities found but couch on amounts to be spent on exploration and exploitation by foreign companies, as if to tell the people that they should not expect much for themselves but to allow the foreign companies recover their investments first before thinking of local development.

In the case of the Logone-Birni find, the people were informed that the Chinese company has already spent US$18 million, about FCFA 9 billion, in exploration works and expects to spend more in determining whether the find would be enough for profitable exploitation.

Even if the quantity of oil found were to be announced, Cameroonians would find it difficult to believe the figures because, over the years, the people have been treated as strangers in the exploitation of their own natural resources, which have hardly been of any benefit to them.

In fact, the late SNH General Manager, Jean Assoumou, did not hesitate some years back to tell Cameroonians that the oil business was so complicated that only he and the Head of State, Paul Biya, understood what oil exploration and exploitation was all about.

Before countries such as Angola, Equatorial Guinea, Ivory Coast, Uganda etc became oil exploiters and exporters, Cameroon was one of those few African countries that found and began exporting oil not long after independence. And whilst late comers into the oil club have so much to show for their black gold, Cameroonians have little to show by way of development after more than thirty years as a petroleum exporting country.

Until foreign lending institutions and nations started asking for oil production figures and revenue derived therefrom as pre-requisites for lending to Cameroon during the lean years of economic hardship in the early and mid-nineties, Cameroon oil production was a guarded secret known only to insiders and cronies at the Presidency of the Republic.

During the Ahidjo years and more than ten years into the Biya presidency, oil revenue was never indicated in the national budget but kept in a special escrow account in the presidency to be expended according to the whims and caprices of the Head of State.

Thus, revenue from the nation’s main foreign exchange earner became the property of the president and his men to be dispensed on under-the-table political deals. To date, production figures are so hard to come by within Government circles and figures available are most times supplied by foreign companies involved in exploration, exploitation and export, which figures are doctored to suit the business expectations of these foreign investors.

According to official figures, Cameroon currently produces 65,330 barrels of oil per day as against 76,650 barrels in 2002, 94,000 in 2004, 82,300 in 2005, 87,400 in 2008 and 77,310 in 2009. This is a far cry from the peak production figures of 185,000 barrels per day in 1985, 177,000 in 1986 and 174,000 in 1987.

From an enviable position of one of Africa’s rare oil producers shortly after independence, Cameroon today stands at 54th world oil producer and 13th in Africa behind Nigeria, Algeria, Angola, Libya, Egypt, Sudan, Equatorial Guinea, Congo Brazzaville, Gabon, South Africa, Chad and Tunisia.

Cameroon’s proved reserves now stand at 200 million barrels placing it at 57th position in the world oil club and in 14th position in Africa behind Libya with 47 billion barrels in proved reserves, Nigeria with 37.4 billion barrels, Angola with 13.5 billion barrels, Algeria with 13.4 billion barrels, Sudan at 6.8 billion, Egypt 4.3 billion, Gabon at 2 billion barrels, Congo Brazzaville with 1.6 billion, Chad 1.5 billion, Uganda 1.5 billion, Equatorial Guinea 1.1 billion, Tunisia 425 million barrels and Cote d’Ivoire 250 million barrels.

Cameroon’s reserves stood at 200 million barrels in 1980 and dropped to 80 million in 2004 before starting a creeping rise in 2005 to 85,000 million, 90 million in 2006, 98 million in 2008 and returning to 200 million in 2011 after the Ebonde fields in the Littoral Region started production.

Before the production in the Littoral Region was announced, more than 99 percent of petroleum production in Cameroon which accounted for over 70 percent of the nation’s foreign exchange reserves was in the English-speaking Southwest Region.

Paradoxically however, there is no all-season road leading to the oil fields, whereas several French-speaking regions have been benefiting from the oil revenue by way of tarred roads and other amenities because their kith and kin either controlled oil revenues or held ministerial positions that enabled them invest the oil revenue in their regions of origin.

These are some of the reasons for Anglophone anger that has been fuelling the Anglophone secessionist movement the Southern Cameroons National Council, SCNC.

“Some of these supposed oil finds in Francophone Cameroon are announced with pump for political and strategic reasons. They are intended to send a message to the Anglophones that oil is not only found in their region so they should stop making noise about benefits from oil production”, opines Rudolf Bessingi, a university student from Ndian Division in the Southwest Region from where most of Cameroon’s oil is currently being produced.

“If you go to the ground in those Francophone areas, you will find nothing by way of oil wells or field work years after the announcements are made”, added Bessingi’s friend, Johnson Modiki from the same division.

It is estimated that about FCFA 200 billion (US$400 million) in oil revenue was unaccounted for between 2006 and 2009 and this excluding the FCFA 15.5 billion (US$31 million) that was misappropriated by ministers involved in the now exposed presidential plane purchase scam.

It should be recalled that the former Secretary General in the Presidency of the Republic, Jean-Marie Atangana Mebara and former Director General of the defunct Cameroon Airlines, Yves Michel Fotso, as well as several other high Government officials have been jailed for the misappropriation of 15.5 billion (US$31 million) supposedly intended for the purchase of a new Boeing 737 plane for President Biya, which money was disbursed by the National Hydrocarbons Corporation but was never received by Boeing.

That is just the tip of the iceberg and it is part of documented oil revenue. The amount involved by way of fixed production figures that are always below real production amounts and which sales revenue is shared between Government supervisory and monitoring agents and the oil companies will never be known. What is known is that the figures are mind-burgling.