CAMEROON – The government Cameroon is seeking to repurchase Total Outre-Mer S.A.’s shares in Sonara, the only refinery in the country, according to a report published by the Technical Committee for Rehabilitation of Public and Para Public Sector Enterprises (CTR).
According to the CTR, the government promised to buy those shares at US$9.6 million (XAF5.2 billion). If successful, the purchase will make Cameroon the sole owner of Sonara, the commission explained.
According to the document, Total Outre-Mer S.A currently owns 4% of Sonara while 96% is owned by the government (81.95%) and its institutions (SNH: 6.06% – CSPH: 4.22% and SNI: 3.77%).
The CTR reveals that SONARA has been in a bankrupt situation since 2014. Also, part of the refinery’s plants was ravaged by fire on May 31, 2019, worsening its debt.
Currently, CTR estimates, SONARA’s short term commitments total XAF898.38 billion. The refinery is a semi-public company created on March 24, 1973.
It is a Simple Topping/Reforming Refinery initially built to process Arab light crude. However, Cameroon is producing heavy crude, therefore a mismatch between the infrastructure at the refinery and the type of crude available.
Sonara is a semi-public company created on March 24, 1973. It is a “topping reforming” type refinery, that is to say simple. It was originally designed to process light crude (Arabian light).
However, Cameroon currently produces heavy crudes. There is therefore a mismatch between the existing tool at the refinery and the crudes available.
Since the 2014 fiscal year, Sonara has been in a bankrupt situation according to the Technical Commission for the Rehabilitation of Enterprises in the Public and Para-public sectors (CTR).
The commission indicates that the refinery constitutes a budgetary risk for Cameroon. Indeed, it informs, In H1, 2019, the national debt committee (CNDP) authorized Sonara to agree to the US$160 million loan Vitol was offering.
This loan was to refund what the refinery owed crude oil suppliers since 2013 and fund its operating costs, which increased when SONARA’s production capacity rose from 2.1 million to 3.5 million tons.
The loan increased the budgetary risk of Sonara.