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Chadian President Expels Two Oil Companies

On Sunday, Chadian President Idriss Deby expelled two oil companies, Chevron of the United States and Petronas of Malaysia; both are members of the Exxon-Mobil conglomerate. Since 2003, Chad has been exporting oil under a project funded by the World Bank and a consortium of oil companies led by Exxon-Mobil. Under that agreement, a percentage of the oil revenues go to development projects in Chad. However, in light of the President’s decision, Chad’s agreement with the World Bank is now in question.

VOA English to Africa reporter James Butty spoke with Ian Gary, an Extractive Industries analyst with Oxfam about how the agreement is affected by this decision.

“I think that the action that is taken by the Chadian government vis-à-vis Chevron of the United States and Petronas is related to their commercial agreement and to the tax obligations of the companies. But it’s not related to how the government actually plans to spend the revenues it generates. If the Chadian government is successful in its attempts both to increase tax payments as well as to renegotiate the contract then certainly there will be more revenue they will have available to spend under the agreement that they have with the World Bank.”

Gary says President Deby’s comment that Chad is engaged in a battle for economic sovereignty is misleading.

“I think that certainly this is a populist message that Deby is sending to the people. At the same time, the government has received a large amount of money from the consortium, and there have been problems and delays with spending the money. So in one part it may be an attempt to divert attention from the apparent lack of benefits so far in the project.”

Gary says President Deby’s action may be an attempt to increase Chad’s share of its oil revenues.

“This move on the part of the Chadian government is certainly in line with oil and gas producers around the world who are seeking to gain a greater share of the value of the resources that are being exported during this period of high oil and gas prices. But at the same time the government needs to do a much better job in managing those revenues and allocating them to poverty reduction on the ground.”

Presently, Gary says, Chad is not on a collision course with the World Bank because he says both sides seem to be happy with the agreement.

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