Chad Plans to Evict 2 Oil Firms Over Unpaid Taxes

By Madjiasra Nako
Associated Press
Sunday, August 27, 2006

N'DJAMENA, Chad, Aug. 26 -- Chad's president on Saturday ordered two oil companies, Chevron Corp. and Petronas, to leave the country, saying that neither had paid taxes and that his country would 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 Exxon Mobil Corp. -- a deadline of just 24 hours to start making plans to leave.

"Chad has decided that as of tomorrow, Chevron and Petronas must leave Chad because they have refused to pay their taxes," Deby said in the broadcast.

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 60 percent 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 Exxon Mobil, said by e-mail that neither his company nor affiliate Esso Chad had been asked to leave.

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, including oil and metals. Earlier this month, 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.

The production and export of petroleum in Chad are overseen by the Exxon Mobil-led consortium. Under the mechanism, Exxon Mobil, which is based in Texas, is responsible for 40 percent of the country's production, while Chevron has 25 percent and Petronas has 30 percent.

The three companies agreed to finance a $4.2 billion, 650-mile pipeline to deliver oil from landlocked Chad to a port in Cameroon.

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

From October 2003 to December 2005, the consortium exported 133 million barrels of oil from Chad, according to the World Bank. Chad earned about 12.5 percent on each barrel exported, or $307 million.

But the venture has proved troubling for Chad, one of the poorest countries in the world. 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 revenue to help citizens.

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

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

Chad government spokesman Hourmadji Moussa Doumgor told reporters 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 an OPEC member, has struggled with discontent over its poor economy, and unhappiness has intensified over the failure of its oil field, which went online for development in 2003, to provide an immediate boost.

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