LONDON Sep 8, 2006 (Dow Jones Newswires)
Chevron Corp. (CVX) has agreed to pay additional taxes to the government of Chad, and in return will be allowed to stay in an international consortium producing oil in the central African country, a spokesman for the Chadian president's office told Dow Jones Newswires.
Chad's President Idriss Deby had said in late August that Chevron and Malaysia's Petroliam Nasional Bhd, or Petronas, had failed to pay back taxes amounting to $450 million.
Deby had said that Chevron and Petronas must leave the country if they did not pay the taxes.
Dieudonne Djonabaye, head of communications for the Chadian president's office, said Chevron has committed to pay the taxes "in the coming days," following a meeting Thursday between Deby and Chevron Chief Executive David O'Reilly in Paris.
"Those who pay taxes can stay," he said.
The spokesman didn't say how much Chevron had agreed to pay, although Deby had originally accused the two companies of failing to pay about $450 million.
Another person with knowledge of the Paris negotiations and outside of the Chadian government confirmed to Dow Jones Newswires the outline of the agreement. But the person couldn't say how much Chevron had agreed to pay.
Analysts have said that Deby's announcement might have been aimed at squeezing more taxes out of the companies at a time when prices are roughly double what they were in 2000, when the oil companies had originally signed the deal with the government.
The spokesman also said that no agreement had yet been reached with Petronas, however.
Don Campbell, the head of public relations for Chevron, said he couldn't comment on talks with Chad.
"We are in communications with the government on the issue," Campbell said. "The details of those communications are confidential."
Consortium members Exxon Mobil Corp. (XOM), Chevron and Petronas financed a $4.2-billion, 1,060-kilometer pipeline from Chad to Cameroon's Atlantic port of Kribi. ExxonMobil hasn't been asked to pay additional taxes so far, however.
According to the U.S. Energy Information Administration, Chad's total oil output was almost 250,000 barrels a day in 2005. Chevron produced about 40,000 barrels of oil equivalent a day in Chad that year.
Chevron has a 25% stake in the Chad pipeline consortium, while Petronas has a 35% stake and ExxonMobil has a 40% stake. The pipeline has capacity of 225,000 barrels a day.
The tax claim against Chevron and Petronas came as governments of oil-producing countries around the world, from Russia to Venezuela, are becoming more confident about asserting their interests over the companies that operate on their territory.
Copyright (c) 2006 Dow Jones & Company, Inc.
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