Cameroon+Petroleum

=Addax Petroleum Likely to Increase China's Status of Second Largest Oil Producer in Cameroon=

Executive Summary:
Addax Petroleum,which is a subsidiary of China's Sinopec, likely to increase China's status of second largest oil producer in Cameroon in the next five years. China became the second largest oil producer in Cameroon in 2011 when China Petroleum and Chemical Corporation (Sinopec) attained 80 percent of the shares in Pecten Cameroon Company. This new company goes by the name Addax Petroleum Cameroon Company (APCC). The new company has increased its daily output from 12,000 barrels to 16,000 barrels. Newly discovered oil and gas reserves in the Iroko blocks of Rio del Rey are expected to make Addax Company's annual interest oil output reach 1 million tons by the end of 2013.

Discussion:
In 2011, China became the second largest oil producer in Cameroon after Addax, Sinopec's subsidiary, acquired 80 percent of Shell's shares of Pecten Cameroon Company. The price was not disclosed, and the company changed its name from Pecten to Addax Petroleum Cameroon Company(APCC). The other 20 percent of the company is controlled by Cameroon's National Hydrocarbons Corportation (SNH). This acquisition gave Addax 11 exploration blocks and 42 producing fields. Addax has taken over the assets efficiently and has increased the daily output of interest oil from 12,000 barrels to 16,000 barrels. The recoverable reserves are increased by 66.7 percent, and 40 percent of the acquisition fund recovered.Addax announced a discovery of new oil and gas resources in the Iroko blocks of Rio del Rey, Cameroon, which is the first major commercial oil and gas discovery since 2006. According to a preliminary estimate, the workable reserves of the oil block are approximately 20 million barrels, and the mine-able reserves of gas are 200 billion cubic feet. Addax projects its company's annual interest oil output is expected to reach 1 million tons in 2013. Addax has an exploration license for the Ngosso area, which contains several hydrocarbon discoveries, but has not seen any exploration activities for 20 years. Addax in 2008 signed an agreement with Cameroon to acquire 100 percent of Iroko's interest and operations. APCC's 11 offshore blocks are located in the Lokele Association, Rio Del Rey, and Dissoni. In Lokele, 6,000 barrels per day from Mokoko Abana Production is net to Addax. The Rio del Rey daily production is approximately 30,000 barrels of which 7,300 barrels is net to Addax. In 2014, the Dissoni North Development project is scheduled to produce above 14,000 barrels-per-day, which Addax receiving 5,000 of those barrels-per-day.

** Analytic Confidence: **
Analytic confidence is medium. Source reliability ranges from medium to high. There is no conflict between sources. The analyst had low expertise on the subject, worked alone while also collaborating with a group, and did not use a structured analytic method. The subject is moderately complex and the deadline was moderately easy to meet.
 * Analyst:** RoseAnna Wright