Petronas disputes Chad’s tax claims
Malaysian state oil company Petronas has disputed the Chad government’s claim that it failed to pay millions of dollars in taxes, but said it was willing to resolve the issue with the oil rich African nation.
Idriss Deby, the president of Chad, said on Wednesday that his country must have a 60 per cent stake in its oil output after receiving “crumbs” from foreign companies running the industry.
He said Chevron and Petronas were 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 government to discontinue operations because of the dispute over taxes.
Petronas said on Wednesday that it had fully complied with its contractual obligation including all tax payments under the agreements that had been signed with the government of Chad in the year 2000.
“Petronas is proactively working toward finding an amicable solution on this matter. It is regrettable that the government of Chad acted in this manner while discussions were ongoing,” Petronas said.
Exxon Mobil, along with Chevron and Petronas, had agreed to finance a $4.2 billion underground pipeline to deliver oil from landlocked Chad to the Atlantic port of Kribi, in Cameroon.
Validity in question
The companies agreed to invest after the World Bank gave the project its blessings 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.
The World Bank had previously frozen an oil revenue account in a dispute over how Chad spent its oil profits.
Petronas said the issue raised by Deby “relates to the validity of one of the agreements signed between the parties which had previously been accepted”.
Deby’s administration also ordered Petronas to cease all activities and leave the country, the company said.
It said it does not have any staff in Chad at the moment.
The three government officials who signed the deal with the oil companies have also been suspended by Deby.