Yaounde, Cameroon Africa. (Cameroon News) – Victoria Oil and Gas chair man Kevin Foo seems to be the least perturbed by delays and says that the Logbaba field will kick off as per plans.

Raising the bars at Logbaba gas plant project which on completion will begin supplying gas to industries in Douala, Cameroon’s largest city Victoria Oil & Gas (LON:VOG) chairman Kevin Foo stated that it was imperative that a license be offered to the company for exploitation permission so that it can start off with the process of supplying gas for which the plant is being commissioned in the first place. He said that the company would be sure to get the necessary licenses and would start supply within just five months of securing the green signals.

Investors have been quite apprehensive and there have been mixed responses from the markets following the delay that the government of Cameroon and President Paul Biya has been showing towards doing the necessary processing in the application for the relevant licenses.

Oil and gas Plant

The stock price has decreased by 30 per cent ever since the beginning of this year, though analysts are hopeful that there will be a sharp increase once the documents are processed and the license is granted. “We must remember that this is a very high profile project in Cameroon and the first exploitation decree of its type to be issued,” said today.

The company was able to garner funds worth £10.8 million last November, and now VOG is confident that it has adequate cash in its kitty to make its strategy operational in no time.

It proposes to pump the Logbaba gas into a pipeline that will run in and around Douala, interconnecting industries where gas needs to be supplied. The pipeline network design as well as the engineering detailing has been finished with and the relevant machinery purchased and brought over to the site.

Expro Worldwide, which has been offered the contract for the leased process gas separation and sprucing up facilities, has already transmitted its equipment into Cameroon.

The construction and laying of the 25 kilometre underground gas pipeline is a fairly simple project in civil engineering terms and will be employing just basic items like long stretches of heavy duty plastics pipes, a device that will be connecting them along with the earth movers.

The setting up of VOG’s manufacturing facilities, during the course of these activities, is being carried out in the field on the outskirts of Cameroon’s largest city.

The first level supply requirement has been estimated to be 8.5 million cubic feet of gas a day, which is just a minor percentage of what the oil plant will actually be exploiting.

Victoria’s two wells flowed at a total of 77 million standard cubic feet a day, in spite of the network having a ceiling of 60 million at a pressure of 5.5 bars.

It is anticipated that the oil producer and supplier will pull in more industries and other businesses into their customer list as time lapses and current users are also most likely to ramp up their usage if the supplier can prove to be a trustworthy and economic option.

It will cost the end user close to 100,000 euros for a new user to make their switch fr4om their existing form of energy into gas but this gap in finances can be bridged in just a few weeks considering the benefits that gas offers. On the whole the foray of natural gas into the country opens a totally novel market and one that offers highly lucrative prospects.

The country, similar to the scenario that most other developing African nations faces, is regularly affected by shut downs and power outages as well as routine stoppages in power supply mostly because the existing supply grids are struggling very hard to meet the excessive demand patterns for electricity.

The company estimates that if it can successfully set up a track record for trust worthiness and economy, then local businesses will be more than willing to further their ties with the provider.

On more specific terms the customers would then be willing to offer funding for an in house, gas powered generating equipment that totally eradicates even the possibility of a power outage and ensures regular and smooth supply of power thereby improving the efficiency of the businesses.

Victoria has developed a forecast that thermal demand for gas in Douala will be around 15 million cubic feet a day, with feed power amounting to an extra 30 million cubic feet in future.

Moving on, the group is also open to the idea of partnering with an independent power generator, which would see a radical alteration in terms of production statistics, though this is for sometime in the years to come.

The present plans are to get output amounting to around 40 million cubic feet a day by 2015-16.

“We remain on course to have a very successful year at Logbaba,” Foo said.

“The delay in getting the exploitation decree is minor in the overall context of this project and the future remains very exciting for us all.”

The chairman was addressing the media when he announced the interim results, which showed the pre-tax loss brought down to US$833,000 from US4.5 million a year earlier.

When asked about its other prestigious projects in other parts of the world, the company said its operations at West Medvezhye, Russia, “are gathering momentum”.

“Our gas tomography and passive seismic surveys concluded last year confirmed direct hydrocarbon indication in six accumulations.
“VOG’s technical team has carried our preliminary integration of the new data with existing datasets including seismic and well data. Work is progressing and the studies are highlighting several interesting leads for more detailed analysis and future drilling.”

This month, the company representatives has spoken to Russian geosciences experts with diverse experience in the region and has already put in place a seismic reprocessing and geological modeling study to once again interpret certain target areas.

“We plan to drill two exploration and appraisal wells by the end of 2012,” Foo told investors.

“Drilling locations will be decided once we receive the results of the study by Mineral, which is expected to take four months and an additional 185 kilometres of 2D seismic which will also be acquired this year.”

“In addition, we are assessing ways of exploiting the well 103 discovery to generate cash.

“This work will incorporate the 2011 subsurface studies and data acquisition and conceptual development studies to evaluate various surface production facilities and downstream options for commercializing these reserves.”

Cameroon is a country where industries suffer from regular power outages and shut downs and getting the Logbaba Natural Gas plant in place will radically alter the power condition in Douala which is the country biggest industrial hub.

However the company is still awaiting the results of the applications that it has submitted for securing the exploitation licenses and the unforeseen delays though the chairman voices is not affecting the plans or the outcomes, is definitely causing a lot of trouble when immediate action should actually have been taken to ensure that the licensing process happens with due diligence and immediate effect because Cameroon and its people stand to benefit a lot from such a project.