ExxonMobil Begins Exploration in Chad

ExxonMobil has begun exploration in an environmentally sensitive project in the West African nation of Chad. Five rigs have recently begun exploration drilling. Plans call for 12 wells to be drilled by the end of 2002. The company plans to drill approximately 300 well over the course of the estimated 25-30 years of the field's life.

The 665-mile pipeline that will connect the Doba basin in Chad to the Port of Kribi on the coast of Cameroon has come under fire from environmentalists. The pipeline is scheduled to open at the end of 2003 and is expected to transport 250,000 barrels of oil during peak output.

Last week the board of directors of the World Bank gave its approval for the $4 billion dollar project despite an internal report suggesting it was harming the environment and missing other objectives. The board, where representatives of the shareholder countries make decisions about loans, sided with a report by the bank's management. That report rejected the findings of the internal panel but agreed to make improvements on environmental, social, economic, poverty reduction and monitoring issues. The bank is funding $140 million of the $4 billion project.

ExxonMobil is the operator of the project with a 40 percent interest; Petronas holds 35 percent and ChevronTexaco holds the remaining 25 percent.

ExxonMobil reports that more than 45 percent of the export pipeline had been welded and buried in the ground. Pipeline construction advanced about three kilometers per day, despite the arrival of the first storms of the rainy season as the quarter was ending. It said work was also under way for the construction of crude oil storage tanks, pumpstations and pressure reducing stations.

Turning to environmental issues, the report said that the Wildlife Conservation Society had been chosen to oversee work on the new M'bam and Djerem National Park. The new park in northeast Cameroon and the Campo Reserve just south of Kribi are being developed as part of the overall plan to mitigate the environmental impact of the pipeline.

The involvement of the World Bank and the IFC helped the oil companies to overcome strong environmental protest to the building of the pipeline.