Chad has announced the nationalization of all the assets of Esso Tchad, a former subsidiary of the American hydrocarbon giant ExxonMobil whose recent sale to a British company N’Djamena is contesting.
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In a press release published on March 24, the company in question, Savannah Energy PLC, protested once morest what it considers to be “a direct violation of international conventions”, and of a recent arbitration in its favor by the Chamber International Commerce of Paris (ICC), and announces its intention to pursue the state Chadian.
“Are nationalized all the assets and all the rights of any kind resulting from the conventions, research permits, operating authorizations and authorizations to transport hydrocarbons of the company Esso Exploration and Production Chad Inc.” reads in a decree signed by Chadian President Mahamat Idriss Déby Itno.
“Right of first refusal”
On December 9, 2022, Savannah, which operates mainly in Africa, announced in a press release that ExxonMobil had sold to it all of the assets of its subsidiary Esso Exploration and Production Chad Inc., which include concessions in certain fields – in particular the deposit of Doba in the south – and the sale of the oil extracted, as well as a stake in the Chad-Cameroon pipeline which allows the crude to be transported to the Cameroonian port of Kribi.
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Chad had immediately contested this sale, ensuring that it had been “carried out despite the express objections of the Chadian government” and in defiance of its “right of preemption”. The case had been brought before the ICC which had arbitrated on January 7 in favor of Savannah Energy.
Vital assets
The “Doba” field and the Chad-Cameroon pipeline constitute vital and sovereign assets for Chad, they cannot be jeopardized by an irregular operation”, justified its Ministry of Petroleum following the announcement of the acquisition in December last.
In 2003, Chad became one of the African oil producing and exporting countries on which it has since become very dependent. Profits from hydrocarbons represented 11.33% of its GDP in 2020, according to the World Bank.
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This nationalization comes “as Savannah Chad Inc’s. – as the British company renamed Esso Chad – had halted “and immediately reversed the historic decline” of the former ExxonMobil subsidiary and reached “an average daily production of 29,349 barrels since December 9, 2022”, and “ launched investments to substantially increase this production”, argues Savannah Energy in son communiqué.
(with AFP)
