ExxonMobil Chad-Cameroon oil pipeline in service
By OGJ editors
HOUSTON, Oct. 13 -- The first 950,000 bbl of crude oil from the recently completed Chad-Cameroon oil pipeline was offloaded into a tanker Oct. 3 from a floating storage and offloading (FSO) vessel in the Gulf of Guinea 7 mi. off Kribi, Cameroon and is being delivered to world markets.
The $3.7 billion Chad Cameroon oil development and pipeline project was inaugurated Friday at the project's operations center at Kome in southern Chad. The system transports previously landlocked oil 660 miles from Bolobo, Mindoum, and Kome fields near Doba in southern Chad, through eastern Cameroon to Kribi. There it is transported offshore to the FSO for export.
The project is a partnership of the Governments of Chad and Cameroon, the World Bank Group, and sponsors Esso Exploration & Production Chad Inc. 40%, Malaysia 's national oil company Petronas Carigali Sdn. Bhd. 35%, and ChevronTexaco Corp 25%. Esso, a subsidiary of ExxonMobil Development Co., is operator.
Although the project, initiated in 1976, took 27 years from concept to completion, the pipeline construction and pipeline fill operations completed a year ahead of schedule, Exxon said, along with field facilities at one of the oil fields under development. Drilling in the fields will continue during the next 2 years.
Exxon expects the central treating facilities to be completed by yearend, with full 225,000 b/d production capacity targeted for early 2004.
Since 1993, ExxonMobil said, the project held nearly 5,000 public consultation meetings in hundreds of villages within the project area, implemented a rigorous, closely monitored environmental management plan, employed 35,000 people, 80% of whom were Chad or Cameroon citizens, and spent more than $650 million with 2,200 local companies.
It also built roads and bridges; implemented extensive public health education programs focused on malaria and HIV/AIDS prevention; and donated facilities such as schools, community water wells, and clinics.
In Chad the growth rate of the gross domestic product (GDP) increased to nearly 11%/year since construction began from 1%/year prior to construction, ExxonMobil said.
Controversy continues
The $2-3 billion or more in oil revenues estimated to be paid to Chad over the 25-30 years of the project should also raise the standard of living of the people there, but Catholic Relief Services, in a written statement Thursday, raised issues that it said remain to be addressed.
CRS said the revenue management law covered only the three oil fields in the Doba region, while other fields yet to be developed remain outside the mandate. ExxonMobil has already discovered six oil fields having a combined 75 million bbl of net oil reserves in addition to the three fields in Chad (OGJ Online, Mar. 31, 2003). Any fields using the pipeline should be covered by the same mandate that governs the original three fields, CRS said.
The organization said the plan does not cover indirect revenues such as taxes and customs duties and that the revenue oversight committee "has limited capacity to perform its role." In addition, in January Chad's president will be able to change the mandate targeting funds for the development programs in Doba region.
Even though the first oil revenue payment is due this month, CRS said: "regional development plans and spending plans for priority sectors still are not in place. Neither are democratically chosen local governance institutions that would enable quality spending of Chad's petrodollars."
And in Cameroon, which will receive about $500 million over the period, CRS said no revenue management system is in place. The transparency issue is one the World Bank has tied to its financing (OGJ Online, Oct. 10, 2003).