Posted on 08/26/2006 4:12:24 PM PDT by thackney
N'DJAMENA, Aug 26 (Reuters) - Chad ordered U.S. energy giant Chevron and Malaysia's Petronas on Saturday to leave the country within 24 hours for failing to honour tax obligations, a move apparently aimed at increasing control over its oil output.
"From tomorrow, the representatives of Chevron and Petronas must leave Chad and close their offices," President Idriss Deby told a government meeting.
The companies had been asked this month to honour corporate tax obligations. "Unfortunately the government has received no reaction from the two partners," Deby said.
The surprise move followed Chad's decision to create a new national oil company which it said should become a partner in the country's existing oil-producing consortium, led by U.S. major Exxon Mobil and including Chevron and Petronas.
Petronas holds 35 percent of the consortium, Chevron 25 percent, and Exxon the remaining 40 percent.
"Chad with Exxon will manage its oil while waiting to find a solution with the two other partners," Deby said.
Landlocked Chad, which began pumping crude in 2003, produces around 160,000-170,000 bpd but most of its people remain poor.
Industry experts said Deby's government was clearly anxious to carve out a more advantageous position as Chad's oil production, which began in 2003, continued to expand.
"Chad must get involved in the production of its oil to control its wealth and develop and increase its participation in the (consortium) pipeline," Deby said, referring to a 250,000 barrels per day pipeline to the Cameroon coast.
Under the 1988 agreement with the foreign consortium, Chad gets 12.5 percent of the wellhead value of total production, before quality discount and the cost of sending it through the pipeline to Cameroon's Kribi terminal.
"Despite the rise in the price of a barrel, now estimated at around $70, Chad doesn't get much from its oil revenues," Deby told the meeting with ministers and political parties.
"In less than three years of exploitation the consortium has earned $5 billion for a $3 billion investment. In contrast, Chad has just received crumbs: $588 million, just 12.5 percent."
SHIFTING ALLEGIANCES
The move came on the heels of Chad's shift of diplomatic relations from Taiwan to China, a major oil investor in neighbouring Sudan. Chadian officials have said they would welcome Chinese investment in the oil sector.
The current and former ministers who had handled Chad's oil negotiations are being dismissed. They would answer before the courts on charges they had sent letters to the two foreign oil firms advising them not to pay the taxes, Deby said.
Deby, who needs increased oil revenues to tackle a security threat from eastern rebels and also poverty, has called the original 1988 oil development deal "a fool's agreement" and called for its renegotiation.
His government has threatened the country's oil partners before. In April it said it would stop oil production completely unless the World Bank unlocked an oil revenue account frozen in a dispute over how it spent its oil profits.
Chad -- ranked by a Transparency International survey last year as the world's most corrupt state -- later backed away from the threat and the dispute was resolved.
I'm thinking Dahomey and Djibouti deserve at least an honorable mention
Now that all the infrastructure is in..the expensive cost...now they want more money....they forget about the capital that was put in up front....
Yep, my thoughts exactly. These companies put in the wells and if they are required to leave they should "take the wells with them". That is what should have been done all over the middle east when our oil companies were kicked out of countries.
Good luck getting that oil out of the ground yourself, "President" Idriss!
Is Chad another Islamic Paradise??? Isn't Chad guilty of crimes against humanity for persecuting Tuaregs - a minority Islamic group?
Exxon should just hire an army of mercenaries and tell Chad's "Government"(collection of retarded communuists who couldn't find their asses with both hands much less pull oil out of the ground)to go pound sand.
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