Victoria settles Cameroon dispute with Eneo
London-listed Victoria Oil & Gas has settled its dispute with Cameroonian power generator Eneo over non-payment for gas supplies, it said on April 19.
Victoria terminated its take-or-pay supply contract with Eneo in July last year, after Eneo's debts for supplies had mounted to over $16mn. The company had to reach out to alternative buyers to replace some of the lost sales.
In a stock filing, Victoria said it agreed a settlement deal on April 16 with Eneo, under which it should receive 2.4bn Central African CFA franc (around $5mn) within 30 days. The payment relates to outstanding invoices for October, November and December of 2019, plus interest.
Eneo was forced to shut down the 30-MW Logbaba power plant in September 2019, after its generator supplier Altaaqa suspended operations because of unpaid invoices filed to Eneo. Even though there was no demand, Victoria's marketing division Gaz du Cameroun (GDC) continued billing Eneo because of the take-or-pay condition in their contract.
The settlement means Victoria will receive payment for four of the 10 outstanding invoices to Eneo plus interest.
"We are very pleased to have settled another legacy issue without recourse to time-consuming and expensive litigation or arbitration, as such legal costs have been crippling the company in recent years. Arbitration would be under Cameroonian law and could take several years," Victoria CEO Roy Kelly commented. "We believe the avoidance of further legal costs in pursuit of the Eneo receivables is in the best interests of shareholders and partners, and allows management to focus on the business and strategy."
Through GDC, Victoria has a 57% interest in the Logbaba gas field, assessed to hold 19bn ft3 of proven gas. Its partners are RSM Production with 38% and Societe Nationale des Hydrocarbures with 5%.
Eneo is 51% owned by Actis, a London-based investment company, and 44% by Cameroon's government. Its employees control the remaining 5%.