(Business in Cameroon) - In Cameroon, the junior British company Victoria Oil & Gas (VOG) just entered the Bomono production sharing contract through its wholly-owned subsidiary, GDC Bomono. This, after several months of negotiations with EurOil, a subsidiary of the British oil and gas company Bowleven, who owns the permit.

GDC Bomono now owns an 80% shareholding on the area against 20% for EurOil who retains the status of operator. According to a communiqué issued by Bowleven, the objective of this lease agreement is to promote, in the short term, Bomono’s potential by selling more gas and further developing upstream activities in the area.

Based on the terms of the agreement, EurOil will receive 100,000 new ordinary shares from VOG based on a rate corresponding to the average share value recorded 10 days prior to the signing of the document, representing 69.23 pence per share. The company will also receive a licence-fee corresponding to 3.5% of the production of GDC Bomono Limited to a maximum of $ 20 million in total usage fees. The contract also mentions that EurOil agreed to pay to GDC Bomono 50% of any deficit in the case that, after the first three years of operation, GDC’s revenues are lower than the development expenditure.

For its part, GDC will purchase and take care of the sale of fuel against a weighted average of total past sales, and pay a toll charge for use of the pipeline network erected by Bowleven. GDC should also finance the connection of the Bomono pipelines to the national distribution network as well as the construction of the processing plant of the gas extracted on Bomono. This should cost $6 million.

For Kevin Hart (photo), the MD of Bowleven, this agreement is beneficial for the development of the licence and maintaining 20% on the permit is a privileged path in the promising Cameroonian gas market. He expressed the delight of the company's entire management team and said to be eager to work with VOG in order to “achieve together the operating potential”.

Similar comments from the side of Ahmet Dik, MD of VOG, who reiterated the commitment of the company that he leads to build and develop new gas infrastructure in Cameroon. According to him, the new actions of the group on Bomono will allow it to achieve this objective.

The Bomono production sharing contract covers two blocks in the onshore Douala basin, over 2,328 km2.

Olivier de Souza