By:NIKOH MEFEUGENG CristelleMinistry of Water and Energy

REGIONAL TRAINING COURSE ON UNITED NATIONS

FRAMEWORK CLASSIFICATION 2009 FOR EVALUATION OF

URANIUM AND THORIUM RESOURCES AND TO LEVERAGE

TRANSPARENT AND EFFECTIVE COMMUNICATION.

C7-RAF-2.011-004/15

LUXOR , EGYPT 18– 22 OCTOBER 2015

Case Study: THE LOGBABA NATURAL GAS PROJECT GAZ DU CAMEROUN (GDC)

OUTLINE• GENERAL INTRODUCTION

• THE LOGBABA NATURAL GAS PROJECT• APPLICATION OF UNFC-2009 TO THE LOGBABA

NATURAL GAS PROJECT• BENEFITS OF UNFC-2009 TO CAMEROON• CHALLENGES AND WAY FORWARD• CONCLUSION

GENERAL INTRODUCTION

• Cameroon has resources of bauxite and other minerals, including deposits of cassiterite, cobalt, gold, iron ore, lignite, nickel, petroleum, and uranium.

• Cameroon has proved reserves of natural gas of 154 billion cu m situated around the Douala/Kribi –Campo.

• Cameroon is a suitable African country that host to a developing economy, serving most of Central Africa with goods and services.

• The power grid is reliant on hydroelectric dams to supply 75% of power and the shortfall is made up from heavy fuel oil and gas. Hydroelectric dams are highly seasonal, with stream rates significantly varying from 6000m3 per second in the wet season to 50m3 per second in the dry season.

GENERAL INTRODUCTION

• The port-city of Douala is a major industrial zone within Cameroon and it requires high levels of consistently delivered grid power all year round.

• Currently, Cameroon’s energy demand is growing at 7% annually and gas is seen as a key element to Cameroon’s national energy strategy.

• As with many hydro electrical systems, transmission loss is a constant issue across distances to different consuming regions.

• Therefore, the need for thermal gas supply and provision of energy is necessary to ensure stable power supply.

THE LOGBABA NATURAL GAS PROJECT

• This project is operated by GAZ DU CAMEROUN S.A (GDC), a subsidiary company of VICTORIA OIL AND GAS PLC.

• GDC was inaugurated in November 2013 by H.E President Paul Biya, President of the Republic of Cameroon.

• GDC supplies gas to industries in the Douala region of Cameroon, from its onshore logbaba gas project.

• With the help of good infrastructures, Industrial customers are primarily supplied with gas through a 31.3km pipeline network built by GDC in Douala.

THE LOGBABA NATURAL GAS PROJECT

• Under Russian classification system, as of January 2009, Sibnats estimated that the well -103 discovery contained 14.4 mmboe of recoverable C1+C2 reserves.

• Total prospective recoverable resources of the block in 2013, was calculated as approximately 1.4 billion of which 722 mmbbls is attributed to oil and 3.9 Tcf (695 mmboe) is attributed to gas.

• The logababa gas project situated in Douala the industrial region of Cameroon, has an estimated reserve of 212 bcf (billion cubic feet).

The UNFC-2009 Classification TablePresently in Cameroon, there exist no local official and standard classification system for fossil energy and mineral reserves and resources. Therefore, the application of UNFC-2009 in the Energy/Mining sector is a necessary tool for sustainable development.

OPERATIONAL UPDATE OF LOGBABA GAS PROJECT

Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014

Average gas production (mmscf/d)

12.6 4.5 4.1 4.0 2.6

Total gas sold (mmscf) 1,120.09 404.51 374.38 368.19 281.09

Condensate sold (bbls) 13,445.1 6,345.2 2,265.3 5,667.3 4,990.4

Production: •Gas production increased by 178% for the period compared to Q1 2015, with an average daily production of 12.6 mmscf/d. Production reached a peak of 16.9 mmscf/d, with an average 5 day working week output of 1.3 mmscf/d. •The significant expansion follows the first grid by new thermal customers being connected, including the Dangnote cement plant commissioned in June 2015. Sales: •Gas sales in Q2 2015 ($9.8m) was almost four times that sold in Q2 2014.

Source: VICTORIA OIL AND GAS PLC

APPLICATION OF UNFC -2009 TO THE LOGBABA GAS PROJECT FROM BASIC KNOWLEDGE

N° DEPOSIT OPERATOR RESERVES (bcf)

UNFC CLASS

UNFC SUB CLASS E F G

1 Logbaba-Douala

GAS DU CAMEROUN

S.A By

VICTORIA OIL&GAS

PLC

212 COMMERCIAL PROJECTS:project confirmed to be technically, economically, and socially feasible.

On Production: project is actually producing/extracting and selling one or more commodities to market as at the effective date of evaluation.

1 1.2 2

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PROJECT NAME UNFC CATEGORIES

Socio-Economic Viability (E)

E1: Extraction and sales has been confirmed to be economically viable.E1.1: Extraction and sales is economic on the basis of current market conditons and realistic assumptions of future market conditions.

Project Physibility (F)

F1: Feasibility of extraction by a defined development project confirmed. F1.1: Extraction is currently taking place.

Geological knowlege (G)

G1: Quantities associated with a known deposit that can be estimated with a morderate level of confidence.

DESCRIPTION OF THE LOGBABA GAS PROJECT USING UNFC-2009 CATEGORIES

CHALLENGES FACED IN REPORTING MINERALS

• NO official and unique reporting template by the Government leads to varied reporting methods and poor management of resources;

• Lack of legal backing and inefficient enforcement by government, makes acquisition of data from companies difficult :

• Misreporting and underreporting of data• Unavailability of computer based GeoData storage system • Inadequate capacity and awareness to the stakeholders

Creating a national coordination committee made up of the government, industries, Universities and other professional bodies will facilitate the understanding and promotion of UNFC.

Convene meetings with all stakeholders, to discuss the possibility of harmonising reporting, by considering the application of UNFC 2009

Further capacity building. Implementation of UNFC-2009 backing in policy and

legislative framework.

WAY FORWARD

BENEFITS OF UNFC TO CAMEROON

• Uniformity and consistency in reporting by companies using UNFC-2009.• Facilitates international comparison thereby attracting

foreign investors.• Developed to meet the needs of all classes of

stakeholders in the mineral and energy sector.• Promotes effective management of limited resources by

accurately assessing its supply base.• Enhances transparency and effective communication.• Enhances a clear mastery and classification of mineral

resources at all categories thereby promoting Zero waste.

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THE LEGAL FRAMEWORK

• Law No 2012/006 of 19 April 2012 carrying

the gas code.

• Decree No 2014/3438/PM of October 27, fixing the modalities of application of law No 2012/006 of 19 April 2012 carrying the gas code.

CONCLUSION

With effective enforcement of the National coordination committee for UNFC-2009, and Cameroon meeting up with such an international mineral reporting standards, foreign investors will be attracted to help develop the infrastructure needed to become a sustainable and Emerging Economy by 2035.

THANKS!

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