January 20, 2007 / 7:51 AM / 12 years ago

UPDATE 3-Chad leader wants majority stake in oil output

(Updates with quotes, background, adds bylines)

By Stephanie Hancock and Betel Miarom

N’DJAMENA, Aug 29 (Reuters) - Chad must have a 60 percent stake in its oil output after receiving only “crumbs” from a foreign consortium running the industry, President Idriss Deby said on Tuesday.

Such a stake would match the share held in the consortium by two companies, U.S. major Chevron Corp. and Malaysia’s Petronas, which Deby ordered to leave the country three days ago.

He says the two are refusing to pay taxes owed totalling 250 billion CFA francs ($486.2 million).

Chevron (CVX.N), the No. 2 U.S. oil company, confirmed on Tuesday it had received notification from the Chadian government to discontinue operations because of the dispute over taxes. Petronas PETR.UL has said it is seeking clarification.

Some analysts view the expulsion order as a crude move by Deby, who has ruled Chad since 1990 after seizing power, to grab a controlling state stake in the consortium, which is led by Exxon Mobil (XOM.N) and started pumping oil in Chad in 2003.

Addressing a rally, Deby said his landlocked African state, ranked among the poorest — and most corrupt — in the world, was not benefiting enough from its oil. The Chadian state currently has no direct stake but receives royalties and taxes.

“How can we fight poverty and develop our country with crumbs?” he told cheering supporters, some carrying banners reading “Chad’s black gold is not for anyone else”.

“Chad must enter into production at a reasonable level of 60 percent,” Deby told the rally.

He did not spell out whether Chad would simply take over Chevron and Petronas’s combined share or negotiate.

Petronas holds 35 percent of the Doba pipeline consortium, which lifts Chad’s oil output, estimated at 160,000-170,000 barrels per day, and carries it to Cameroon’s Atlantic coast. Chevron has 25 percent and Exxon the remaining 40 percent.

Deby dismissed as “crumbs” the 12.5 percent wellhead value share of total production that Chad is earning.


“A revolution has started ... which will bring salvation to our people, our country and the future generations,” Deby said.

Human rights groups have criticised Deby’s government and the consortium for not using oil revenues to help Chad’s poor.

A Chevron spokeswoman in London said the company was talking to the Chadian government. “Chevron has been in full compliance with all of our tax obligations,” she said.

Deby said Chad would continue working with Exxon Mobil, the consortium leader.

Deby fought off attacks by eastern rebels this year and was re-elected in early May in polls boycotted by opponents.

With oil prices around $70 a barrel, oil-producing nations from Algeria to Venezuela are looking to cash in and wrest more benefits and control from multinationals in a strategy dubbed resource nationalism.

Venezuelan President Hugo Chavez, who delights in baiting the United States and pillorying Western capitalism, is a vocal advocate of this trend and Venezuela’s deputy foreign minister Reinaldo Bolivar held talks with Deby on Friday.

Bolivar said he had discussed oil cooperation.

In early August, Deby broke Chad’s ties with Taiwan and established relations with China, and analysts believe he may be hoping to obtain oil investment from Chinese companies.

((Writing by Pascal Fletcher; editing by Alistair Thomson and Robert Woodward; Dakar Newsroom +221 864 5076)) Keywords: ENERGY CHAD DEBY

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