Chad bulks, oil prices rise


Small threat to world supply: Chad’s oil exports – 160,000 barrels a day – are small by international standards and have a high sulphur content, reducing their value. But president Idriss Deby appears to be gambling that any threat to the world oil supply, no matter how small, will bring attention to his plight and free up funds he needs to finance his government.

$US125m in oil royalties frozen: In January, the World Bank froze an account with $US125 million ($A171 million) in oil royalties in London, Nasser said. It also cut $A169 million in assistance after Chad changed an oil revenue law passed in 1999 as a condition for the World Bank’s support for the pipeline.

Living standards law changed: Nasser said the World Bank must either release the funds or the operators of the pipeline must compensate the Chadian Government. The law required two-thirds of oil revenues to go toward improving living standards in one of the world’s poorest countries. It also required 10 per cent of proceeds to go into a savings fund to be used when Chad’s oil reserves are exhausted.

$A420m earned so far: An Exxon Mobil-led consortium exported 133 million barrels of oil from Chad between October 2003 and December 2005, according to World Bank statistics. Chad, which receives a 12.5 per cent royalty on each barrel exported, earned $A420 million, the bank said. The consortium invested $A5.7 billion in the pipeline.

Lost royalties demanded: Nasser said the pipeline would continue to operate if the consortium paid the royalties frozen in London and paid future revenues directly to Chad’s treasury.

The Canberra Times, 17/4/2006, p. 9

Source: Erisk Net  

Leave a Comment

You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.