Chad seeks 60% stake in oil output

Chad must have a 60 per cent stake in its oil output after receiving only "crumbs" from a foreign consortium running the industry, Idriss Deby, the country's president, has said.

    Chad currently has no direct stake in its oil revenue

    Such a stake would match the share held in the consortium by two companies - US major Chevron Corporation and Malaysia's Petronas - which Deby ordered to leave Chad three days ago.
     

    He says the two are refusing to pay taxes totalling $486.2 million.

     

    Chevron, the second-largest US oil company, confirmed on Tuesday that it had received notification from the Chadian government to discontinue operations because of the dispute over taxes. Petronas has said it is seeking clarification.

     

    Controlling stake

     

    Deby dismissed Chad's share of
    oil revenue as 'crumbs'

    Some analysts view the expulsion order as an attempt by Deby, who seized power in 1990, to grab a controlling state stake in the consortium, which is led by Exxon Mobil and started pumping oil in Chad in 2003.

     

    Addressing a rally, Deby said his landlocked African state, ranked among the poorest - and most corrupt - in the world, was not benefiting enough from its oil. The Chadian state currently has no direct stake but receives royalties and taxes.

     

    "How can we fight poverty and develop our country with crumbs?" he told supporters, some carrying banners reading "Chad's black gold is not for anyone else".

     

    "Chad must enter into production at a reasonable level of 60 per cent."

     

    He did not say whether Chad would simply take over Chevron and Petronas's combined share or negotiate.

     

    Petronas holds 35 per cent of the Doba pipeline consortium, which lifts Chad's oil output, estimated at 160,000 to 170,000 barrels a day, and carries it to Cameroon's Atlantic coast. Chevron has 25 per cent and Exxon the remaining 40 per cent.

     

    Deby dismissed as "crumbs" the 12.5 per cent well-head value share of total production that Chad is earning.

     

    'Revolution'

     

    "A revolution has started ... which will bring salvation to our people, our country and the future generations"

    Idriss Deby, the president of Chad

    "A revolution has started ... which will bring salvation to our people, our country and the future generations," Deby said.

     

    Human rights groups have criticised Deby's government and the consortium for not using oil revenues to help Chad's poor.

     

    A Chevron spokeswoman in London said the company was talking to the Chadian government. "Chevron has been in full compliance with all of our tax obligations," she said.

     

    Deby said Chad would continue working with Exxon Mobil, the consortium leader.

     

    He fought off attacks by eastern rebels this year and was re-elected in early May in polls boycotted by opponents.

     

    With oil prices at around $70 a barrel, oil-producing nations from Algeria to Venezuela are looking to cash in and wrest more benefits and control from multinationals in a strategy dubbed resource nationalism.

     

    Hugo Chavez, Venezuelan president, is a vocal advocate of this trend and Reinaldo Bolivar, Venezuela's deputy foreign minister, held talks with Deby on Friday.

     

    Bolivar said he had discussed oil co-operation.

     

    In early August, Deby broke Chad's ties with Taiwan and established relations with China, and analysts believe that he may be hoping for oil investment from Chinese companies.

    SOURCE: Reuters


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