US House to reschedule hearings on Chad-Cameroon pipeline project

Jan. 25, 2002
A US House of Representatives committee will review testimony from industry, policymakers, and other stakeholders on the latest developments regarding a controversial $3.5 billion oil development project in Chad later this year, a key lawmaker said Friday. The hearing was originally scheduled for Sept. 11, 2001.

By the OGJ Online Staff

WASHINGTON, DC, Jan. 25 -- A House committee will review testimony this year from industry, policymakers, and other stakeholders on the latest developments regarding a controversial $3.5 billion oil development project in Chad, a key lawmaker said Friday.

Rep. Edward Royce, chairman of the US House Subcommittee on Africa, said there is no specific date yet, but hearings will be held before Congress leaves for the year in October.

Hearings were originally scheduled for Sept. 11, 2001, but were abruptly cancelled when Capitol Hill and much of Washington, DC, were evacuated following terrorist attacks against the World Trade Center in New York City and the Pentagon in northern Virginia.

Now, in the post-Sept. 11 environment the idea of bolstering US energy ties with Africa holds even more urgency and should be treated as "a national priority," Royce said.

"Our traditional sources of oil are not as secure as we thought they were," Royce said, in a reference to the US' campaign against the Middle East-based terrorism group Al Qaeda. He made those comments at a symposium organized by the nonpartisan Institute for Advanced Strategic and Political Studies. Speakers from Capitol Hill, the State and Defense Departments, and oil companies with investments in Africa spoke on the growing role the continent is expected to play in the US energy security debate.

US officials said about 15% of the US' import needs are met with African oil, and that figure could double within 10 years. The US imports about 60% of the oil it consumes.

An important step in boosting African investment is the construction of a pipeline from oil-rich Chad to Cameroon.

Drilling operations for the first test wells in Doba oil field in southern Chad were due to start last month as part of a controversial $3.5 billion project to produce the country's first oil (OGJ Online, Dec. 10, 2001). The project includes a 650-mile pipeline to Cameroon.

Some civil rights and environmental groups argued that Chad's royalty revenue from the project would continue to encourage corruption and human rights abuses.

Eventually a compromise was struck that would give oil companies, international investors, and local citizens a clear accounting of how much revenue the project will generate. US State Department officials called the arrangement "a new model" for other projects that may help Chad and other oil-producing nations break free of a cycle in which weak governments poorly manage oil and other natural resources in a way that hurts instead of helps their own citizens.

The pipeline project has been backed by the World Bank with a $200 million initial loan and is planned to have a 25-year life, with 300 producing wells producing a peak of 250,000 b/d in the middle of the decade. First oil is due in 2003 and output will be exported via a 24-in. pipeline to the Cameroon coast, where export facilities are under construction.

ExxonMobil Corp. is operator of the project through its Esso Chad subsidiary with 40%, Petronas Carigali Sdn. Bhd. of Malaysia has 35%, and ChevronTexaco Corp. 25% (OGJ Online, Dec. 10, 2001).