ExxonMobil announces start of Chad pipeline construction
Copyright 2000 Agence France Presse
October 18, 2000
The Exxon Mobil Corporation on Wednesday said its Chad affiliate had begun construction of a World Bank-backed oil development and pipeline project in the west African state, an undertaking bitterly opposed by environmental and human rights groups.
At a ceremony attended by Chad President Idriss Deby, Cameroon President Paul Biya and World Bank Africa vice president Callisto Madavo, Esso Chad president Thomas Walters said production could begin as early as 2003.
"We have defined an aggressive construction schedule that is based on rapid mobilization and commencement of critical infrastructure work in the fourth quarter 2000," he said, according to a company statement issued here.
"Pipeline installation will begin in 2001, in parallel with construction of oilfield processing facilities. Drilling of the first of the planned 300 wells will begin in late 2001 and continue through initial production start-up."
Walters said the project was expected to yield one billion barrels of oil over its 30-year-life.
Despite strong objections from human rights and ecology advocates, World Bank directors last June agreed to lend 39.5 million dollars to Chad and 53.4 million dollars to Cameroon to help build the 1,070 kilometer (670 mile) pipeline, which will carry oil from the Doba field in southern Chad to loading facilities off Cameroon's Atlantic coast.
In addition, the International Finance Corporation, the bank unit making loans to the private sector, is to lend 100 million dollars to the 3.7 billion dollar joint venture pipeline, in which ExxonMobil and rival Chevron are participating with respective stakes of 40 and 25 percent as is Malaysia's Petronas, with 35 percent.
Bank approval came in the face of warnings from environmental and human rights groups in Chad and elsewhere that the pipeline could pollute regional river systems, degrade the Atlantic rainforest and endanger the lives of local people.
"The Bank's decision to participate was an important milestone and served to validate the consortium's environmental and social assessments and mitigation plans," Walters said.
"The consortium has developed its plans through an unprecedented consultation process with Chadian and Cameroonian citizens."
He added that the consortium would also provide support for two national parks in Cameroon and development of a specific benefit plan for the Bakola pygmies.
Depending on world oil prices, according to Walters, the project will have an economic development value of between 2.5 and 8.5 billion dollars for Chad and by up to 900 million dollars for Cameroon.
Such estimates include direct revenues, such as royalties and taxes, as well as indirect benefits, such as employment and purchases from local businesses, he added.