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Africa's mammoth oil project comes of age
BBC ^ | 07/14/03

Posted on 07/14/2003 6:53:41 AM PDT by nypokerface

One of Africa's most ambitious - but typically controversial - oil projects will come to fruition this month, when Chad begins pumping oil for export via Cameroon.

The total cost of extracting the oil from Chad and piping it to Cameroon is estimated at $3.7bn (£2.2bn), one of the biggest investments ever made in the region.

When production gets up to full speed next year, this one project alone is expected to account for 45-50% of Chad's national budget.

The project is in the final stages of testing, Esso Chad's spokesman Miles Shaw told BBC News Online, with the first oil expected to be pumped "very soon".

The income from the oil should provide annual revenues of $80m for Chad and $20m for Cameroon.

But international charities are already concerned that, as in the oil-rich countries of Nigeria and Angola, the money earned will not feed through to poor people.

Ten year process

Consultations on the project began ten years ago, with the whole length of the 1,070km pipeline walked by experts.

Almost 1,000 village-level meetings were held, including 165 consultations with Pygmys in Cameroon, and the pipeline's original route was altered 20 times.

It will take the oil two months to travel the length of the pipeline, with the first oil tanker not expected to load until November.

But the giant project, funded by Exxon Mobil and the World Bank, has been dogged by controversy from the start.

In 1999, Anglo-Dutch Shell and France's Elf pulled out of the project without explanation.


In 2000, the government admitted diverting $4m of the pipeline's investment funds to buy weapons for use in its war against northern rebels.

The construction of the pipeline has also attracted a high level of criticism from environmentalists.

Chad was recently ranked the most corrupt of 21 African countries by a survey on good governance criteria by Transparency International.

And the International Monetary Fund last month demanded early repayment of a loan from Chad, saying the government provided false information in order to get the money in the first place.

To counter the scepticism over the management of the oil revenues, Chad has passed a law under which 80% of the income will be used to finance education, health, environment, water and rural development.

Another 10% of the income must be deposited in an international bank for the benefit of future generations, while another 5% will be used to benefit the local population of the Doba basin, where the oil is drilled.

The lack of money ploughed back into the villages nearest the oil developments has been the main cause of recent unrest and riots in Nigeria.

Despite these efforts, charities are still sceptical that the project can help overcome the extreme poverty facing many of Chad's eight million people.

TOPICS: Business/Economy; Extended News; Foreign Affairs
KEYWORDS: africa; cameroon; chad; energy; oil; pipeline

1 posted on 07/14/2003 6:53:42 AM PDT by nypokerface
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To: nypokerface
And whence go the Washington oilmen to Africa to get ahold of this sweet stuff.
2 posted on 07/14/2003 8:17:31 AM PDT by warchild9
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To: All
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3 posted on 07/14/2003 8:17:38 AM PDT by Support Free Republic (Your support keeps Free Republic going strong!)
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