Wednesday, August 30, 2006

Chad Update: Idriss Deby Wants Economic Resources From Oil Output

Chad demands stake in oil output

By Stephanie Hancock
BBC News, N'Djamena

Chad's President Idriss Deby Itno has said in a public speech the country must have a stake in oil production.

Speaking outside his presidential palace in N'Djamena, Mr Deby told crowds a revolution had started.

This comes three days after he ordered two foreign oil companies, Petronas and Chevron-Texaco, out of Chad.

The two oil firms control 60% of the consortium which runs Chad's pipeline, the same as the share Mr Deby says the government wants.

They were ordered to leave the country as Mr Deby accused them of not paying taxes.

If Petronas and Chevron-Texaco had been hoping President Deby might have mellowed since the weekend, they were wrong.

He declared Chad must enter into oil production at what he called a reasonable rate of 60%. Crucially, 60% would give the government of Chad a majority share and therefore control over the consortium which runs the country's pipeline.

Mr Deby did not repeat his earlier demand for the two oil companies to leave Chad, but he did insist they must pay the Public Treasury $1bn.

This is double the amount he asked for from the firms at the weekend, and an official later said the president had made a mistake and the amount of tax to be paid is actually $500m.

But it was clear from Mr Deby's emphatic language that he believed Chad had a sovereign right to take more control of its own oil.

Story from BBC NEWS:
Published: 2006/08/29 16:28:22 GMT

Oil wealth fails Chadian villagers

By Stephanie Hancock
Ngalaba, southern Chad

Giant electricity pylons and the glow of gas flares dominate the landscape in southern Chad, but people living admidst the oil fields do not receive any of the power in their villages.

It makes for an unusual sight: the very best of modern industrial technology alongside a village people whose lifestyle has barely changed in centuries.

Although cattle still roam freely and the fields remain lush and green, villages like Ngalaba have become known as a "village enclave" - a community totally surrounded by oil wells.

Village chief Tamro Mbaidjehuernan says his community has been changed by Chad's oil project - but only for the worse.

"They took a lot of our fields to make room for the oil installation," explains Mr Mbaidjehuernan.

"We received compensation, but it wasn't very much. We used to cultivate peanuts, sorghum, maize and millet. But now we can hardly grow anything - there's just not the room."


Esso, the US company which operates the 1,000 mile (1,609 km) pipeline that runs from Chad through Cameroon to the coast, says it paid villagers market rates for their land, built a school in the village as compensation, and also donated a well.

But as a row over Chad's oil revenues intensifies in the capital, people in Doba Basin remain disillusioned with the project that began pumping oil three years ago.

A few minutes walk from Ngalaba lies the village of Maikeri, another "village enclave", where Chief Djinodji August says the project has proved a false dawn.

"They said this project would bring us happiness. But from where I'm sitting, it's going from bad to worse. There have been a lot of false promises."

The chief's son, Bendoh, also complains about a night-time curfew in their region, put in place by the local government after a spate of thefts at nearby oil facilities.

"This curfew has installed a climate of fear," says Bendoh. "If people go to their fields or want to visit a friend, they are scared of seeing a gendarme as he will make trouble for them.

"Even if you are transporting a sick person to a clinic - as there is none in our area - they will search you, ask you questions and sometimes take your money."


When the World Bank supported Chad's bid to start pumping oil, it insisted on setting up a group called the 5% Committee - which allocates extra oil revenues to the oil-producing region.

But despite being set up 18 months ago, the committee has yet to finish a single project.

Urbain Moyombaye, a local development worker who himself lives just kilometres from an oil field, says villagers' lives have not improved with the oil project.

"We have not seen any concrete positive impact for the local population," says Mr Moyombaye.

"There is nothing. Go to any village - I say any village - in the Doba Basin and there is nothing. Not a single thing has been built with oil revenue money."

However, some oil money is being spent in the region.

In nearby Doba town, the capital of this oil-producing region, work is starting on a brand new $5m football stadium.

But the stadium was not approved by the 5% Committee - instead, it is being built on the direct orders of Chad's president, Idriss Deby.

Waiting game

It is exactly the type of unilateral decision the World Bank was hoping this project could avoid.

"All these projects are being decided by 'derogation'," says Mr Moyombaye.

"Normally, before starting projects, the committee should ask local people what they want.

"How can we build a stadium when there are people who don't even have clean drinking water?"

Pierre Djasro is one of the nine members of the 5% Committee, and is also village chief of Miandoum village.

The roof of his village school was recently ripped off in a heavy storm, but even he admits this is unlikely to be fixed any time soon.

"I've formally asked the 5% Committee to come and have a look," said Mr Djasro, who adds that the school is so overcrowded many pupils study outdoors.

"They said they'd come a week ago but they haven't come. Even today they promised me a visit, but they've not arrived."


While it is clear there is little respect for proper procedure, many people believe there is another reason why the oil cash is not getting through.

"The real problem in Chad is not lack of resources - it's corruption," says Arnaud Ngarmian, member of a civil society which monitors Chad's oil project.

"The World Bank agreed to finance this project to help reduce poverty, but the way oil revenues are being managed, this will never happen," he says.

"Projects are being built without due process, and the World Bank says nothing. The World Bank has a big responsibility to the Chadian people."

Chad's oil project was designed to try and lift the country out of poverty.

It was supposed to be the World Bank's flagship project, a way of making poverty - and corruption - a thing of the past.

But three years into this project, ordinary Chadians say they are still waiting for their share of the country's oil riches.

Story from BBC NEWS:
Published: 2006/08/30 00:13:43 GMT

Chad oil company deadline expires

A 24-hour deadline by Chad's government for two major foreign oil companies to leave the country has expired.

President Idriss Deby ordered US firm ChevronTexaco and Malaysia's Petronas, together responsible for 60% of Chad's production, to quit the country.

Three government ministers have been sacked and may be prosecuted over the alleged non-payment of taxes by the oil companies, a charge the firms deny.

It is not clear how the authorities might enforce the expulsion order.

"The problem was that Petronas and Chevron had to pay tax, then they arranged with a certain individual, a minister, in order to get a tax exemption," Mahamat Bechir Okormi, the country's minister for state control and ethics, told Reuters news agency in Kuala Lumpur on Monday.

"In Chad, only the national assembly can exempt companies, not a minister."

On Sunday, the government announced the dismissal of Oil Minister Mahamat Nasser Hassane, as well as the ministers for livestock and planning.

"ChevronTexaco and Petronas must leave Chad because they have refused to pay their taxes," Mr Deby said on Saturday.

Chevron says it has fully complied with tax demands and not had "official notification" to leave.

Petronas has not commented.

Taking control

The expulsion of Chevron and Petronas would leave only Exxon Mobil remaining in the consortium which handles the country's oil production.

However, since Exxon Mobil runs the pipeline and the other two firms have few staff in the country, production is unlikely to be seriously affected, the BBC's Stephanie Hancock reports from N'djamena.

President Deby said his government would take control of the remaining reserves.

The surprise decision has sent shock waves around the oil industry, our correspondent says.

The government has recently been hinting it wants to join the consortium.

Privately, many observers feel the firms may have been kicked out to make room for Chinese oil companies. Just three weeks ago, Chad resumed diplomatic relations with Beijing.

If this proves to be true, it will mark a turning point for relations in this region, our correspondent says.

History of rows

Rows surrounding Chad's oil revenues have been simmering for months.

Earlier this year, Chad threatened to stop oil production if it did not immediately receive several months' worth of oil revenues from the US-led consortium.

Last December the government fell out with the World Bank, after it changed a law which controlled how oil revenues were spent.

The bank, which financially backs the oil project, repeatedly asked Chad not to change the law but it went ahead anyway.

In response, the bank froze all payments of oil revenues to the government.

That row was settled with a deal in July, under which Chad agreed to spend 70% of its oil revenues on development schemes, with 30% going into its overall budget.

Story from BBC NEWS:
Published: 2006/08/28 08:29:33 GMT


Pan-African News Wire said...

Chad, Sudan to restore diplomatic ties

Monday 28 August 2006 8:00 PM GMT

Both sides have agreed to set up a security commission

Chad and Sudan have decided to restore diplomatic relations after almost going to war late last year over alleged Sudanese support for Chadian rebels.

In a joint statement after three days of fence-mending talks in Khartoum, the two sides said they would "immediately" re-establish diplomatic ties and pledged not to interfere in each other's affairs or host rebels fighting the other nation.

More than three years of ethnic unrest in Sudan's western region of Darfur has spilled over into neighbouring Chad, with tens of thousands of refugees crossing the border to escape the fighting.

On Sunday, Ahmat Allami, the Chadian foreign minister, and his Sudanese counterpart, Lam Akol Ajawin, announced the creation of a joint military-security commission and a joint force to secure their border.

Fresh pledge

Resumed bilateral cooperation was also planned in all areas "of common interest", the statement said.

Allami said Chad would "remain committed" to the accords and expressed hope that the restoration of relations would help ease the situation in Darfur.

The combined effect of war and famine there has left as many as 300,000 people dead in the region and displaced more than two million.

On April 14, the Chadian president, Idriss Deby Itno had announced the breaking of relations after rebels from the United Front for Change (FUC) launched an abortive assault on N'Djamena with alleged Sudanese support.

That rupture came despite a summit in Libya in February which had already tried to mend ties between the two governments after N'Djamena pronounced itself in a "state of belligerence" with Khartoum in December owing to its alleged support for the rebels.

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Chad minister defends oil ultimatum

Monday 28 August 2006 7:51 AM GMT

Chad produces about 160,000 barrels of oil a day

A Chad minister has confirmed that his country's decision to expel US giant Chevron and Malaysia's Petronas was for failing to pay their tax and was not aimed to nationalising Chad's oil industry.

Speaking from Kuala Lumpur, Mahamat Bechir Okormi said that the solution was for the companies to pay their outstanding tax, and reiterated that the government was not interested in gaining control of the country's oil production.

"The problem was that Petronas and Chevron had to pay tax, then they arranged with a certain individual, a minister, in order to get a tax exemption," he said.

"In Chad, only the national assembly can exempt companies, not a minister."

Okormi was in Malaysia attending a meeting of Islamic nations discussing corruption.

A history of corruption

Petronas had said at the weekend it had not received any official notification of the move and was seeking information from the government.

Chad's surprise move followed its decision to create a national oil company which it said should become a partner in the country's existing oil-producing consortium, led by Exxon Mobil and including Chevron and Petronas.

Petronas holds 35% of the consortium, Chevron 25%, and Exxon the remaining 40%.

Chad's government has been known to use oil as a bargaining tool to threaten companies and organisations before.

In April it said it would stop oil production unless the World Bank unlocked an oil revenue account frozen in a dispute over how it spent its oil profits.

A Transparency International survey ranked Chad last year as the world's most corrupt state. Chad began pumping crude oil in 2003 and produces about 16,000 to 17,000 barrels per day.

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