VOG Still Lacks Key Client, Gets Creative
UK-listed onshore Cameroon gas producer Victoria Oil & Gas (VOG) is still without its key client, Eneo, and is looking for alternative customers - plus a sale of its minor Russian upstream interest.
VOG said October 22 it remains confident that a solution with Eneo will be found, but added that a resolution has been further delayed because of the recent presidential elections in Cameroon. Eneo's 50 MW plant at Douala is the country’s main power generator but stopped offtaking gas from VOG in January 2018.
In an operations update, it said gross gas sales were 356mn ft3 in 3Q2018, down from 613mn ft3 in 3Q 2017, but up 11% from 320mn ft3 in 2Q 2018 thanks to two new small power plant customers. VOG’s net share of production volumes is 57%.
VOG added that over 30 existing and new customers, most of whom are on its gas network, have expressed interest in adding a small industrial power unit. In return for a 10-year commitment, and minimum guaranteed volumes, customers would pay an all-inclusive gas price, it said.
VOG also said that it will leverage its relationship with Turkish technology firm Naturelgaz aimed at bringing Cameroon’s first Compressed Natural Gas (CNG) customers online in 2019; it sees a near-term potential CNG market within 60km of its Douala base of 4mn ft3/d for use in power generation. Some small generators could also charge batteries for use by rural homes, it added.
Meanwhile it said that talks are continuing “with several interested parties” over VOG’s West Medvezhye oil find in Russia, with its preference being for an outright sale.