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CHAD: Chad Orders 2 Oil Companies to Leave

Chad Orders Chevron and Petronas to Leave Country, Saying Neither Oil Firm Has Paid Taxes

by Madjiasra Nako The Associated Press
August 27th, 2006

Chad's president on Saturday ordered oil companies Chevron Corp. and Petronas to leave the country, saying neither has paid taxes and his country will take responsibility for the oil fields they have overseen.

In remarks on state-run radio, President Idriss Deby gave the companies — part of the African country's oil production consortium that is led by ExxonMobil — a deadline of just 24 hours to start making plans to leave.

"Chad has decided that as of tomorrow (Sunday), Chevron and Petronas must leave Chad because they have refused to pay their taxes," Deby said in a message broadcast on state-run radio.

Deby said Chad, which is one of Africa's newest oil producers and is setting up a national oil company, would take over the oil fields that have been overseen by the American and Malaysian companies and account for some 60% of its oil production.

Sabri Syed, a spokesman for Kuala Lumpur-based Petroliam Nasional Berhad, said he could not comment on Deby's announcement.

Chevron declined to comment.

Mark D. Boudreaux, a spokesman for ExxonMobil, told The Associated Press by e-mail that neither his company, nor affiliate Esso Chad has been asked to leave the country.

If the two companies are evicted, Chad could seek help from China, which has taken an active interest in Africa in its search for raw materials like oil and metals.

Earlier this year, Chad broke off diplomatic relations with Taiwan and turned instead to China, a move that could help it sell its oil to the energy-hungry power.

China is already the largest exporter of oil from Angola and it also exports oil from Sudan.

The production and export of petroleum in Chad are overseen by the ExxonMobil-led consortium. Under the mechanism, Texas-based ExxonMobil Corp. is responsible for 40% of the country's production, while Chevron and Petronas each have 30%.

The three companies agreed to finance a risky $4.2 billion, 659 mile pipeline to deliver oil from landlocked Chad to the Atlantic port of Kribi in Cameroon.

The companies agreed to invest the money after the World Bank gave the project its blessing and after Chad passed a World Bank-backed oil revenues law that required most of the money to be allocated to health, education and infrastructure projects.

From October 2003 to December 2005, the consortium exported some 133 million barrels of oil from Chad, according to the World Bank.

Chad itself earned $307 million, or about 12.5%, on each barrel exported.

But the venture has proved troubling for Chad, at times. In January, the World Bank froze $125 million in oil revenue and cut $124 million in financial aid, accusing Chad of reneging on a promise to set aside part of its oil revenues to help the poor.

Last month, the government reached a deal with the bank and signed an accord to commit 70% of its budget to poverty and development programs.

But the World Bank also agreed to allow 30% of oil revenues to go toward Chad's general treasury, instead of just 15%. Chad can use that money on whatever it wants — including weapons.

Deby's declaration came a day after he urged his citizens to take a more active role in the production of oil.

Chad government spokesman Hourmadji Moussa Doumgor told reporters on Friday that Deby wanted greater profits from oil production.

Deby has stressed that the country "should fully enjoy its oil, mining and other resources," Doumgor said.

Chad, which is not a member of the Organization of Petroleum Exporting Countries, has struggled with discontent over its poor economy, and unhappiness has intensified over the failure of an immediate boost from its oil field, which went online for development in 2003.

Unrest also has spilled over from Darfur, where Sudan's Arab-dominated government is accused of encouraging a campaign of destruction aimed at civilians in African farming villages that are the base for a three-year-old rebellion. Sudan charges that Chad supports the Darfur rebels. Chad, in turn, accuses Sudan of backing eastern Chad rebels.





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