Chad Govt Seeks ExxonMobil Pipeline Renegotiation

LONDON Aug 27, 2006 (Dow Jones Newswires)

Chad's government has told the partners in the oil pipeline operated by Exxon Mobil Corp. (XOM) that it wants to renegotiate the contract of the project, a top official at the country's president office said Sunday.

The statement comes after Chad President Idriss Deby said Saturday that Chad was giving 24 hours to the two other partners in the pipeline, Chevron Corp. (CVX) and Petronas, to pay what he said were undue taxes.

Deby accused the two companies of failing to pay $450 million in taxes as part of agreements signed by two previous government ministers and the current petroleum minister.

Also Sunday oil minister Mahmat Hassan Nasser was removed from office, along with planning minister Mahmat Ali Hassan and livestock minister Mockhtar Moussa, for their alleged involvement in the oil saga, a senior official said on condition of anonymity because he wasn't authorized to speak to the media.

An ExxonMobil spokesman said the company doesn't discuss details of its business activities, but that recent events hadn't affected its operations in Chad.

Speaking to Dow Jones Newswires, Dieudonne Djonabaye, director general of communications at Chad's president's office said "the government in an April correspondance indicated it wanted to renegotiate the pipeline's contract (with all the partners including ExxonMobil) and was seeking the payments of taxes," from Chevron and Petronas.

Djonabaye said the government was seeking 250 billion CFA francs ($506.16 million) in what he said were due taxes from Chevron and Petronas.

He said the government will ask for a stake in fields not covered in the pipeline contract, through a national hydrocarbons company which creation was voted in parliament in July.

Copyright (c) 2006 Dow Jones & Company, Inc.

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