Transit Fee Increases for Chad-Cameroon Pipeline

SNH and COTCO on October 29, 2013 in Yaounde signed an amendment to that effect.

Transit fee paid to the government of Cameroon for forwarding Chadian crude oil through its territory has moved from the hitherto 0.41 US dollars (FCFA 194.91) per barrel to 1.30 dollars (about FCFA 618.02). The Executive General Manager of the National Hydrocarbons Cooperation (SNH) and Chairman of the Pipeline Steering and Monitoring Committee, Adolphe Moudiki, and the General Manager of the Cameroon Oil Transportation Company (COTCO), Christian Lenoble, yesterday October 29, 2013 signed an amendment to the initial convention with COTCO. The ceremony that took place at the head office of SNH in Yaounde was chaired by the Minister of Mines, Industries and Technological Development, Emmanuel Bonde.

The amendment therefore institutes a new rate of the transit fee and according to its terms, the transit fee will be updated every five years as per the annual inflation rates published by the Bank of Central African States (BEAC) during the preceding five years. "The rate is applicable, without discrimination, to all shippers of crude oil originating from other countries and transported through the Chad-Cameroon Pipeline," a press release that sanctioned the amendment signing ceremony states.

It emerged from yesterday's ceremony that negotiations between Cameroon and COTCO took place between February 7 and August 1, 2013 in the presence of Chadian party. The negotiations were conducted for Cameroon by an ad hoc committee created by SNH comprising experts from SNH, the Pipeline Steering and Monitoring Committee as well as from the Ministries of Mines, Industries and Technological Development, Finance and Trade.

Records show that from October 3, 2003 when the operation of the Pipeline began to October 31, 2011, 410.42 million barrels of Chadian crude oil have been exported from the Komé-Kribi 1 terminal to international markets, generating a transit fee estimated at 168.29 million US dollars (about FCFA 84.62 billion) for Cameroon. The transit fee is calculated on the basis of the quantities of crude oil lifted, which quantities are determined by the measuring system installed on the Komé-Kribi 1 terminal. The money is paid directly to the public treasury by COTCO.

Talking to the press after yesterday's ceremony, Minister Emmanuel Bonde said, "Beyond the monetary aspect, the readjustment represents the friendship between two brotherly countries, Chad and Cameroon, and the rest of the sub-region." According to Christian Lenoble, the project is an integration one and unique in the sub-region as it links two countries. "For the past ten years, we have demonstrated a very high quality of operations in the way we conduct our business. I would say the project is in the second phase and we are happy to be part of the experience," the COTCO General Manager said.