CI-NEWS

NEWS: What is the way forward after the SONARA inferno?

2019-06-10

No: 431

What is the way forward after the SONARA inferno?

1.0 I wear many different hats. But this time I speak as an investment banker with over 40 years of experience in banking, oil and gas and telecommunications. The question facing the Republique du Cameroun and Southern Cameroons/Ambazonia is what to do about the Sonara refinery after the inferno of last week.

2.0 I know that our friends in Yaounde including spin doctor Rene Emmanuel Sadi are still going around singing a song entitled "Le Cameroun est un et indivisible". This unity mantra is misleading because it will not help to find the solution to the present crisis following the inferno.

3.0 The reality is that the inferno has introduced a fundamentally new variable in the Anglophone crisis which has morphed into an armed conflict since 2017 resulting in the burning of 300 towns and villages in Southern Cameroons, the creation of 600.000 IDPs and 30.000 refugees in Nigeria and over 3000 killed and counting.

4.0 Sonara has been an important state-owned company since it came into operation in 1973. It is Cameroon's oil refinery, which is almost entirely state owned apart from a 4% stake held by Total, has a capacity of 2.1 million tonnes of crude a year. But there is only one problem. It is located in the town of Victoria in the English-speaking Southern Cameroons.

5.0 The current shareholding of SONARA comprises two groups of shareholders:

The Republic of Cameroon 96%

>The Ministry of Finance

>The National Hydrocarbons Corporation,

>The Fund for the stabilization of Hydrocarbon Prices,

>The National Investment Company

>Oil Companies (Total Outre Mer) 4%

6.0 The main problem facing Sonara now is that at the moment when the main distillation towers and storage tanks were burnt by fire of an unknown origin, the sovereignty of the territory where the plant is located is under dispute between the Yaounde government and the separatist groups whose leaders are currently incarcerated in Yaounde and who claim that the refinery is located in Victoria in the Republic of Ambazonia.

7.0 The estimated cost of repairs of the refinery has not yet been established, but the cost can easily exceed $500 million because additional works of improvement may be required such as the construction of a bitumen plant. The question is what needs to be done to convince any consortium of banks to lend money for this project given the reality that the sovereignty of the territory is now under dispute.

8.0 No banks can finance the project and no insurance company can insure equipment destined for Sonara and no contractors can accept to undertake the repair works involved in construction and repairs until the issue of the sovereignty of the territory is adequately dealt with.

============Proposal============

Energy Exchange Treaty between Southern Cameroons/Ambazonia and La Republique du Cameroun

9.0 My friend Rene Emmanuel Sadi who has become the spin doctor of the Biya regime has now become the spin dreamer of the regime as well . They believe that Sonara has shut down its operations temporarily. But in reality Sonara is gone for good. There will again be a refinery in Victoria. But shall not be called Sonara.

10.0 The government of Southern Cameroons /Ambazonia shall give it a completely new name and the shareholding of 95% currently controlled by the Yaounde tegime, shall have to be negotiated between Ambazonia and the new core investor that will take over Sonara. If the government of La Republique du Cameroun will play a role in the New Sonara, this will have to be negotiated with the government of Southern Cameroons /Ambazonia and a new core investor.

11.0 But Yaounde will have to recognise the sovereignty of Southern Cameroons/Ambazonia before anything can be done. That is the bottom line. This is the bullet that Yaounde must bite. Otherwise the economy of La Republique du Cameroun will be in deep trouble when the prices of petroleum products go up and there are fuel queues at filling stations.

12.0 However, in order to facilitate the raising of finance for rebuilding the refinery, the government of the Southern Cameroons/Ambazonia shall have to negotiate an Energy Exchange Treaty with LRC consisting of two components:

(i) the delivery of petroleum products by pipeline up to a delivery point on the Mungo River for further transmission to SCDP in Douala and

(ii) the delivery of 50-100MW of electricity supplied to Southern Cameroons/Ambazonia by 220 KV High Tension powerline at a delivery point at Santa in the North West and Mbanga in Littoral.

13.0 The Energy Exchange Treaty is a very important component of the separation treaty that must be negotiated between Southern Cameroons /Ambazonia and La Republique du Cameroun because no banks can lend money for the New Sonara project and no contractor can undertake construction work on the New Sonara site unless sovereignty of the Republic of Ambazonia is recognised.

14.0 The purpose of the Energy Exchange Treaty is to ensure that both parties will exist in a symbiotic interdependence and no party shall try to sabotage the other. If La Republique du Cameroun suspends the delivery of electricity supply, the Southern Cameroons /Ambazonia can reciprocally suspend the delivery of petroleum products. Consequently both parties shall have a vested interest to be of good behavior.

15.0 The Energy Exchange Agreement will have to be signed and ratified by the Southern Cameroons /Ambazonia and La Republique du Cameroun and the instruments of ratification shall be deposited at the Secretariat of the United Nations in accordance with article 102 of the UN charter. Once this is done it will become a legally binding instrument under international law that can become part of legal documents for giving comfort to investors to proceed with the financing of the New Sonara.

16.0 For the Southern Cameroons/Ambazonia, the preferred new investor in the New Sonara shall be the Dangote Group because the principal source of the crude shall be Nigeria which shall also become the principal export destination for refined products.

17.0 I am a man with over 40 years of professional experience in banking, oil and gas and telecommunications. I hope my friend Rene Emmanuel Sadi will stop being a dream spinner and tackle this matter seriously with the negotiating team of Sisiku Ayuk Tabe.

18.0 No serious investor can ever invest their money in the New Sonara unless they are sure that the project is going to be placed under the sovereignty of the Republic of Ambazonia. Once an Energy Exchange treaty is signed between LRC and Southern Cameroons /Ambazonia, investors will be ready to finance the rebuilding of the new refinery.

Let us talk. There is no substitute for experience!!!!

Dr. Nfor N Susungi

Chairman

Briscam Freedom Party

Chairman of the Economy Group

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NEWS: What is the way forward after the SONARA inferno?