Par Daniel Claude ABATE*
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1. At the beginning of the 1990s, major oil discoveries were made in Chad on 3 fields in southern Chad (Komé, Miandoum, Bolobo), mainly by the American oil major ESSO EXPLORATION INC and the Malaysian PETRONAS, among others. Chad being a country in the “hinterland”, ie without access to the coast, the question immediately arises of the evacuation of this oil so that its exploitation is made possible.
2. July 1992, after having eliminated the option of evacuation by Nigeria, more expensive and whose oil pipelines are the prey of pirates and rebel groups, the Vice-President of Esso Exploration Inc West Africa, arrives in Yaoundé and announces to the Cameroonian authorities that his group proposes to build an oil pipeline or pipeline for the evacuation of oil production from Chad to the Atlantic coast (Kribi precisely) through Cameroonian territory. What Cameroon accepts not only to help this brother country to benefit from its country but because it earns substantial “royalties” in terms of the right of way for Chadian crude oil which will be added to the large investments and thousands of direct and indirect jobs generated by the construction of this pipeline. The route of the pipeline covers 1080 km including 980 km in Cameroonian territory.
3. The announcement of the construction of a pipeline from Chad and through Cameroonian territory provoked an outcry and fierce opposition from environmental protection NGOs at the international level because the project route crossed a forest area rich in fauna.
4. After more than a decade of battles with environmental movements, and technical and environmental studies for the validation of the pipeline route, the oil companies succeeded in convincing the World Bank to enter into the financing of the project and to bring its skills in governance support. The construction of the pipeline, which began in the early 2000s, will cost more than $2.5 billion, the largest investment of this nature ever made in sub-Saharan Africa. The construction works lasted 3 years (2000 – 2003).
5. For the exploitation of Chadian oil, the company Esso Exploration & Production Chad Inc. (EEPCI) was created from a consortium made up of Exxon, which has since become ExxonMobil (40%, operator), ChevronTexaco (25% ) and the Malaysian state company Petronas (35%). Chad took over Chevron Texaco’s shares in the consortium in 2014.
The 25-year production sharing contract between this company and the State of Chad provided for 60% for Chad and 40% for EEPCI with an average estimate of the price per barrel at $20.
6. For the evacuation of Chadian crude production via the Doba-Kribi pipeline, 2 transport structures are created by ExxonMobil, namely:
– TOTCO (Chad Oil Transportation Company) which manages the Chadian part of the pipeline
– COTCO (Cameroon Oil Transportation Company) for the Cameroonian part of the pipeline and in which SNH represents and defends the interests of the State of Cameroon.
7. In early 2020, ExxonMobil and Petronas announce their intention to exit the Chado-Cameoun oil and pipeline project. ExxonMobil materializes its desire to leave by selling its 40% of assets to the company Savannah Energy, which becomes a shareholder of the 2 transport structures. Its statutes allowing it to enter up to 25% in the capital of foreign oil companies that settle in Cameroon, SNH acquires 10% of the capital of Savannah Energy. Cameroon is therefore in a liberal logic and strategy in accordance with its regulations and business practice in this environment.
8. However, Chad (the new power Deby Fils), for reasons specific to its interests, is unhappy with the conditions for the sale of ExxonMobil’s assets and displays a logic and a desire to take over these assets through nationalization in order to become a shareholder. majority or sole shareholder of the new operator called upon to exploit and transport its oil. Especially since he suspects and accuses, rightly or wrongly, Cameroonian private interests of being behind Savannah Energy
9. The 2 logics (liberal and nationalist) and engage in a showdown. The battle moves to Paris on the ground of the arbitration body of the World Bank. Chad lost arbitration against Savannah last December. Chad, not admitting defeat, decided to resort to the community authorities of the CEMAC to obtain a non-objection to its desire for nationalization. Cameroon refuses or delays giving its non-objection consistent with its liberal logic.
10. The transfer of 10% of the assets of Savannah Energy to SNH, in accordance with the regulations, seems to be on the Chadian side the straw that broke the camel’s back. Chad has decided to force nationalization and transform this “business affair” into a serious diplomatic crisis by recalling its ambassador. I see more in this decision, not as the result of a deep diplomatic crisis between the 2 friendly and brotherly countries, but a means of having this affair settled at the highest level by political compromise and reason of State for the superior interest of both States. The estrangement or crisis will be short-lived.
Daniel C ABATE
– Vice President High Council for ECCAS Business
– Former Area Manager ExxonMobil Center – South – East (2000 – 2005) in charge, among other things, of liaison and follow-up with the authorities of Cameroon during the construction phase of the pipeline
