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Republic of Cameroon Eiti Committee Report on The REPUBLIC OF CAMEROON EITI COMMITTEE REPORT ON THE RECONCIIATION OF CASH FLOWS AND VOLUMES RELATING TO THE EXPLORATION AND EXPLOITATION OF OIL AND SOLID MINERALS FOR THE FISCAL YEAR 2011 August 2013 This report has been prepared at the request of the EITI Committee charged with the implementation of the Extractive Industries Transparency Initiative in Cameroon (EITI Cameroon). The views expressed in the report are those of the Independent Reconcilers and in no way reflect the official opinion of the EITI Cameroon Committee. This report has been prepared exclusively for use by EITI Cameroon and must not be used by other parties, nor for any purposes other than those for which it is intended. Report on the reconciliation of cash flows and volumes relating to the exploration and exploitation of Oil and solid Minerals for the fiscal year 2011 This document has been translated from the French original for reference purposes only. In the event of any discrepancy between this translated document and the French original, the original shall prevail Moore Stephens LLP Report on the reconciliation of cash flows and volumes relating to the exploration and exploitation of Oil and solid Minerals for the fiscal year 2011 CONTENTS EXECUTIVE SUMMARY......................................................................................... 5 Principal findings arising from reconciliation work ........................................................................... 5 Key figures of the 2011 EITI report .................................................................................................. 8 1. INTRODUCTION ........................................................................................... 12 1.1 Extractive Industries Transparency Initiative (EITI) .............................................................. 12 1.2 EITI in Cameroon ................................................................................................................. 12 1.3 The national context of the extractive sector in Cameroon .................................................. 13 2. OBJECTIVES AND SCOPE OF THE ENGAGEMENT ................................. 16 2.1 Objectives of the engagement .............................................................................................. 16 2.2 Approach .............................................................................................................................. 16 2.3 Methodology ......................................................................................................................... 17 3. EITI RECONCILIATION SCOPE ................................................................... 21 3.1 Selection of reconciliation scope .......................................................................................... 21 3.2 Extractive companies involved in the EITI reconciliation ..................................................... 21 3.3 Government Agencies involved in the EITI reconciliation .................................................... 23 3.4 Payment flows involved in the EITI reconciliation ................................................................ 24 3.5 Flow chart of payment flows ................................................................................................. 29 4. RECONCILIATION RESULTS ...................................................................... 31 4.1 Reconciliation by Extractive Companies .............................................................................. 31 4.2 Reconciliation by revenue stream ........................................................................................ 34 4.3 Adjustments .......................................................................................................................... 36 4.4 Payment flows declared unilaterally ..................................................................................... 39 5. FINAL UNRECONCILED DIFFERENCES .................................................... 46 6. ANALYSIS OF KEY INDICATORS IN THE EXTRACTIVE SECTOR ........... 49 6.1 Contribution of the activity in the extractive sector ............................................................... 49 6.2 Contribution of flows in the extractive sector ........................................................................ 49 6.3 Contribution of extractive companies in the extractive sector .............................................. 49 6.4 Revenues declared compared with Government revenues and GDP ................................. 50 6.5 Evolution of production and revenue from oil ....................................................................... 50 7. FINDINGS AND RECOMMENDATIONS ....................................................... 52 7.1 Findings and recommendations of the current year ............................................................. 52 7.2 Monitoring of findings and recommendations of the EITI report 2009-2010 ........................ 54 7.3 Monitoring of findings and recommendations of the EITI report 2006-2008 ........................ 56 ANNEXES ............................................................................................................. 60 Annex 1: Production data declared by extractive companies ........................................................ 61 Annex 2: Breakdown of rights by Oil Company ............................................................................. 62 Annex 3: Breakdown of rights by Mining Company ....................................................................... 64 Annex 4: Tracking table of certified declaration forms ................................................................... 77 Annex 5: Reconciliation sheet by company ................................................................................... 78 Annex 6: Reporting template EITI Cameroon ................................................................................ 98 Annex 7: Stakeholders met .......................................................................................................... 102 Moore Stephens LLP | P a g e 3 Report on the reconciliation of cash flows and volumes relating to the exploration and exploitation of Oil and solid Minerals for the fiscal year 2011 LIST OF ABBREVIATIONS bbl barrel BEAC Bank of Central African States CEMAC Economic and Monetary Community of Central Africa COTCO Cameroon Oil Transportation Company CSPHM Center Of Support and Promotion of Handicrafts Mining DGC Directorate-General of Customs DGT Directorate-General of Taxes DGTFMC Directorate-General of Treasury and the Financial and Monetary Cooperation DMG Directorate of Mines and Geology EITI Extractive Industries Transparency Initiative FCFA Franc CFA (African Financial Community) FEICOM Special Council Support Fund for Mutual Assistance FMI International Monetary Fund IFAC International Federation of Accountants IRCM Tax on Income from Movable Capital ITIE TS EITI Technical Secretariat KFCFA Thousands of FCFA MINFI Ministry of Finance MINIMITD Ministry of Industry, Mines and Technological Development MPCI Mobil Producing Cameroon Inc. NHC National Hydrocarbons Corporation OHADA Organisation for the Harmonization of Business Law in Africa PSRMEE Program Securing Revenue Mines, Water and Energy SIT Special Income Tax SONARA Société Nationale de Raffinage ToR Terms of Reference USD United States dollars VAT Value Added Tax Moore Stephens LLP | P a g e 4 Report on the reconciliation of cash flows and volumes relating to the exploration and exploitation of Oil and solid Minerals for the fiscal year 2011 EXECUTIVE SUMMARY The reconciliation of cash flows and volumes relating to the exploration and exploitation of Oil and Solid Minerals for the 2011 fiscal year covering the period 1 January 2011 to 31 December 2011 was carried out by Moore Stephens between 27 May and 5 July 2013. The assignment was carried out in three stages: the first stage was performed from 27 May to 10 June 2013. It consisted of a scoping study of the oil and mining sectors in Cameroon. At the end of this stage, a scoping report was presented to the EITI Committee. This report included a proposal of the EITI reconciliation scope for 2011 as well as the reporting template. the second stage was dedicated to the training workshop on the reporting template for all those involved in the reconciliation process (extractive companies, government agencies as well as civil society organisations). The reporting template was dispatched to all stakeholders on 13 June 2013. in the third stage we concentrated on the reconciliation of cash flows and volumes relating to the exploration and exploitation of Oil and Solid Minerals declared by extractive companies and Government Agencies. Our reconciliation work was carried out in accordance with the Terms of Reference included in the request for proposal approved by the EITI Committee. The terms and the proposed reconciliation scope were approved by the EITI Committee in its meeting of 12 June 2013. The overall objective of the reconciliation exercise was to assist the Government of Cameroon and other stakeholders involved to determine the contribution that the extractive sector has made to the country’s economy and social development, and to improve transparency and responsibility in the extractive industries’ sector. Principal findings arising from reconciliation work The main findings resulting from our work are as follows: 1. All extractive companies selected for the 2011 reconciliation submitted their reports according the
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