Victoria Oil and Gas recorded a $50.8 million dollar loss, blaming poor relations between the West and Russia for it being unable to sell its Russian asset.
The African energy utility, announcing its year end results to May 2015, recorded a 356% increase in gas production the 12-month period and had realised outstanding production growth as new markets in Cameroon, particularly supplying gas to generate grid power, were opened up to its subsidiary Gaz du Cameroun (GDC).
The loss is primarily due to a $49.8 million impairment charge relating to the group’s Russian asset West Medvezhye. Operations in the group’s Cameroon segment reported a profit after tax of $5.4 million.
Victoria has tried to sell the Russian asset or at least farm-out or create a joint venture. However this has been challenging due to the state of relations between Russia and the West, combined with the low oil price, and so the asset continues to be carried fully impaired, the company said.
The company has reached agreement with Cameroon’s national electricity generating company to provide gas to installations at the Bassa and Logbaba power stations and delivered first gas to provide 50MW of capacity to the Cameroon grid.
In May, Victoria bought the purchase of the Logbaba gas processing plant from Expro for $2.58 million, signficantly reducing monthly operating costs at Logbaba.
Executive chairman Kevin Foo said: “We have also begun to look at other opportunities within Cameroon to take advantage of our proven ability to monetise gas and have been in discussions with several participants in the sector about possible joint ventures and farm-in projects.”
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