Chad scraps Chinese oil permits over alleged environmental violations

M&G Africa Reporter and AFP

Country has a history of difficult relations with Chinese oil companies operating on its soil

"unacceptable practices" that led to "noxious spills" around drilling sites led to suspension of operations (photo: Flickr)

Chad has decided to withdraw five exploration permits issued to Chinese oil giant CNPC and press charges in a spat over a $1.2 billion fine for environmental violations, the oil ministry said.
Oil Minister Djerassem Le Bemadjiel told a press conference late Saturday the move was “to avoid further environmental degradation, not to make place for other companies.”

President Idriss Déby has been touted as an environmental champion in recent years and Chad’s environmental standards, particularly in relation to oil spills and deforestation, are high - a result of the World Bank’s involvement in the early days of the first oil project, in 2003, run by Esso at Doba.
The China National Petroleum Company was forced to suspend operations in Chad in May after refusing to pay a fine of $1.2 billion (800 million euro) for “unacceptable practices” that had led to “noxious spills” around drilling sites.
The government of the large central African nation also said it planned to press charges against the CNPC both in Ndjamena and in France, whose commercial court has a chamber specialising in international disputes.
“Amicable negotiations are no longer possible. All efforts have been in vain,” government secretary general Abdoulaye Sabre told the press conference. “Next week a government delegation will go to Paris to file a complaint with the commercial court for refusal to pay a fine.”
A second complaint has been made in the capital Ndjamena for “environmental degradation and endangering the lives of others”, he added.
Chad, which began exploiting its oil deposits in 2003, has a history of difficult relations with Chinese companies operating on its soil.
In August 2013 the government suspended China’s CNPC’s exploration activities in Koudalwa after environmental violations, and launched an audit of the entire sector.
In March this year Chadians working for one of these companies went on strike to denounce their working conditions and demand salary increases.
According to official statistics Chad produced 120,000 barrels of oil a day in 2011. Oil revenues have allowed the country to modernise its army, improve road networks and public infrastructure.
However parts of civil society are urging the government to use the new oil wealth to improve the living conditions of the population.