Chad Announces Tax Deal With Chevron Oil Corporation

President Idriss Deby of Chad Will Allow Chevron to Remain in Country
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Chad says Chevron agrees to pay tax

Friday 08 September 2006 4:37 PM GMT

Chad is ranked among the poorest countries in the world

Chevron Corporation, the US oil company, has agreed to pay taxes it owed to the central African state of Chad and it can, therefore, continue to operate in the country, a Chadian presidency spokesman said on Friday.

"Chevron has agreed to pay the taxes to the Chadian treasury in the coming days ... it is staying (in the country)," Dieudonne Djonabaye told Reuters by telephone from N'Djamena.

A spokesman for Chevron, the second biggest US oil company, declined to confirm or deny the statement.

Djonabaye said the agreement had been reached during a meeting in Paris on Thursday between Idriss Deby, the Chad president, and Dave O'Reilly, Chevron CEO.

"All I can say is that we are in communications with the government on the issue. The details of those communications are confidential," Donald Campbell, Chevron's media relations manager, said in an e-mail response to Reuters.

Deby, last month, ordered Chevron and Malaysia's Petronas, both partners in an oil producing consortium in Chad led by Exxon Mobil, to leave the country for failing to pay taxes he said they owed.

The Chadian leader, who was re-elected in May and has faced attacks from eastern rebels, has complained that his country is only receiving "crumbs" from the $4 billion Doba consortium, which started pumping oil in 2003.

In what some analysts see as an attempt to join resource nationalism moves taken by other oil producing countries, he has demanded that the consortium agreement be re-negotiated to allow Chad's recently created state oil company a stake.

Poor not benfitted

Although Djonabaye said no deal had yet been reached with Petronas, his statement on Chevron indicated that progress was being made in efforts to resolve the tax dispute with the foreign oil companies.

Deby, softening his original expulsion order, had said in Paris on Monday that he expected the dispute with Chevron and Petronas to be solved through negotiation.

Both companies had initially insisted that they had complied with their tax obligations.

Operator Exxon has said the operations of the Chad consortium,
which produces 160,000-170,000 barrels per day of crude carried by pipeline to Cameroon's Atlantic Coast, was not affected by the dispute.

Human rights groups say that most ordinary Chadians benefit little from the World Bank-backed Doba basin oil project.

Despite starting oil output in 2003, Chad is ranked among the poorest countries in the world and, according to Transparency International, was the most corrupt in 2005.

Reuters
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