As previously announced, the share purchase agreement with PETRONAS (E&P) Overseas Ventures SDN. BHD. ("PETRONAS") for a wholly owned affiliate of Savannah to acquire PETRONAS' upstream and midstream asset portfolio in Chad and Cameroon was terminated by mutual agreement on 13 December 2022. PETRONAS has informed Savannah that it has now completed the sale of these assets to Societe des Hydrocarbures du Tchad, the national oil company of Chad ("SHT") (the "Transaction"). PETRONAS owned 29.77% of Cameroon Oil Transportation Company S.A. ("COTCo"). Savannah has an effective 41.06% indirect equity interest in COTCo, which was acquired from ExxonMobil in a separate transaction that completed on 9 December 2022.
Completion of the Transaction required an approval (the "Approval") from the President of the Economic and Monetary Commission of Central Africa ("CEMAC") which was granted in Malabo on 15 May 2023. At the request of CEMAC, the Approval is subject to certain important conditions, including the dilution of SHT's shareholding in COTCo through the sale of shares in COTCo from SHT to Société Nationale des Hydrocarbures ("SNH"), the national oil company of Cameroon, and a commitment by SHT to maintain the current shareholders' board appointment rights provided by COTCo's bylaws and in particular to not exceed 4 directors representing SHT at the COTCo board of directors.
COTCo has informed Savannah and the other COTCo shareholders that it has not been notified as to how and when the conditions of the Approval will be satisfied. The May COTCo shareholders' meetings have therefore been postponed by COTCo, pending clarity on the fulfilment of these conditions.
As previously announced, pursuant to the terms of a sales and purchase agreement, Savannah Midstream Investment Limited ("SMIL"), a wholly owned subsidiary of Savannah, has agreed to sell a 10% interest in COTCo to SNH, which would see SMIL's ownership interest reduce from 41.06% to 31.06%. As part of this agreement, SNH and SMIL pledged, inter alia, their support of one another as shareholders in COTCo.