Petronas Agrees to Pay Taxes to Chad

LONDON Sep 18, 2006 (Dow Jones Newswires)

Malaysia's state-run Petroliam Nasional Bhd, or Petronas, has agreed to pay taxes owed to Chad's government, a Chadian presidential aide told Dow Jones Newswires Monday.

Petronas has "indicated it agrees to pay the taxes," said Dieudonne Djonabaye, head of communications at the office of Chad's president.

But the issue "cannot be solved in one go," Djonabaye said, adding that the tax-payment schedule has yet to be agreed.

Djonabaye said he wasn't aware of any meeting between Chad President Idriss Deby and Petronas' management, but communications were occurring via fax, telephone and e-mail.

In late August, Chad's president ordered Chevron Corp. (CVX) and Petronas out of the country, saying they had failed to pay back taxes amounting to $450 million.

Petronas' agreement in principle to pay the taxes it owes could smooth the way for the Malaysian company to remain as an equity holder in a Chadian oil-production venture with Chevron Corp. (CVX) and Exxon Mobil Corp. (XOM).

Djonabaye said last week that Chevron had agreed to pay its taxes and would be allowed to stay in the oil consortium.

Earlier Monday, Chevron Vice Chairman Peter Robertson said he expected Chevron to resolve the tax spat with Chad, which threatened its future in the fledgeling African oil producer.

Robertson told Dow Jones Newswires: "I'm quite sure we'll come to an amicable agreement with the government."

Chevron and Petronas continue to negotiate with the government to reach a settlement, Robertson added. He gave no indication as to when final settlement details might be resolved.

The consortium has financed a $4.2 billion, 225,000-barrel-a-day pipeline to Cameroon's Atlantic port of Kribi.

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

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