Chad’s oil industry, with its output of 160 000 barrels a day, is tiny compared with Venezuela and Russia. But Chad — the world’s fifth-poorest country according to the United Nations — is looking to exert more control over its natural resources.
The President, Idriss Déby, recently announced he was kicking United States oil giant Chevron and Malaysian player Petronas — who together own 60% of the consortium running Chad’s -billion pipeline — out of the country for non-payment of taxes, a charge both companies deny. At a rally a few days later, Deby vowed that Chad’s newly created oil company, Societe des Hydrocarbures du Tchad (SHT), should have a 60% stake in the pipeline.
Some commentators started ringing alarm bells about nationalisation, but it is unlikely. Chad does not have the capacity to run its own industry. The SHT announcement happened in September and is not expected to be operational until, at least, January. ”They are starting completely from scratch. It’s taken Angola, for example, 30 to 40 years to build up the expertise to run its own projects, so the idea that Chad could now do it, is just ludicrous,” said Ian Gary, an extractive industries expert at Oxfam America.
The government has since toned down the president’s rhetoric, saying the oil deal should be renegotiated so its state company could have a share and that Chevron and Petronas could also play a part. ”It’s a trend we’re seeing in all parts of the world, where people feel they are being ripped off by their contracts. They are not clueless about how things are, they look at the high prices and they see how much their commercial partners are making,” said Antony Goldman, an international oil analyst based in London.
Chad’s original oil deal, which gave it 12,5% of the royalties, was hammered out almost two decades ago when oil was about a barrel. Now crude is hovering around . Deby complains that Chad has received only -million in the three years the oil has been flowing, compared with the -billion banked by the consortium.
Analysts say there is nothing wrong with developing countries standing up to rich US companies and demanding a greater slice of the profit pie. But that argument becomes complicated with Chad, ranked the world’s most corrupt country by Transparency International.
”In principle, the idea of renegotiating the contract gets unanimous support here. But the reality is ordinary people have seen nothing from the little that Chad is already getting,” said Yaldet Oulatar, the editor of Chadian newspaper N’Djamena Hebdo.
The government has now set up a committee to renegotiate the 1988 agreement. However, the largest stakeholder in the consortium, with 40%, has reacted frostily to the possibility of rejigging the contract. ”Esso Chad and ExxonMobil value contract sanctity and expect the same from the parties with which it enters into agreement,” ExxonMobil spokesperson Susan Reeves said in a statement. — Â