Chad-Cameroon Pipeline: the profitability of the project for Cameroon

This pipeline supplying oil to Chad provides significant revenue for the Cameroon, thus contributes to job creation and the revival of the country's economy. Since 2003, the revenue generated for Cameroon has increased compared to 2018 when taking into account the volume of the trade balance of the port of Kribi in 2019.

According to the National Hydrocarbons Company (SNH), the Chad-Cameroon pipeline continues to generate revenue for the state of Cameroon. The evidence, at the end of the third quarter of 2019, 30 billion FCFA , or $51 million, was reported to this Central African country, as a right of transit, SNH notes. These revenues are estimated to increase by about 23% year-on-year. This is the equivalent of the cumulative volume of over 35 million barrels of oil reported. Remarkable performance made possible by the increased volumes transported through the Komé-Kribi (KK1) terminal of the Chad-Cameroon pipeline.

The revenues generated are paid directly by the Cameroon Oil Transportation Company (COTCO) to the public treasury. We also find that other revenues come from the taxes paid by the companies involved in the construction and operation of the project, not to mention the dividends received by the state as a shareholder of COTCO.

Cameroon revenue growth

Prices have been readjusted since inception. The rate of $ 0.41 per barrel at inception was increased to $ 1.30 in accordance with the endorsement of the COTCO settlement agreement, signed on 29 October 2013. From this endorsement, the updating of this rate every five years based on the average annual inflation rates recorded in Cameroon during this period. Based on this criterion, the transit rate was updated on 30 September 2018 from $1.30 to $1.32 per barrel.

This rate is applied to the quantities of crude oil transiting through the KK1 terminal from October 2018, until September 2023, the date of the next rate update.

SNH notes that almost 2,000 Cameroonian companies have benefited from various service contracts within the Chad-Cameroon gas pipeline project, for an estimated amount of around 270 billion CFAF , or approximately USD 460 million.

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