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Chad Strong-Arms Another Oil Company

MIN READOct 10, 2016 | 09:15 GMT

Chad Strong-Arms Another Oil Company
Chadian President Idriss Deby debuts a pipeline to transport oil from the country's Doba fields, which a consortium led by ExxonMobil developed. Now, the consortium has come under fire from the Chadian government.

(DESIREY MINKOH/AFP/Getty Images)

As a small producer that depends on oil for 60 percent of its government revenue, Chad has aggressively tried to increase its share of profits from the oil it produces. On Oct. 6, a high court in the country ruled that U.S. supermajor ExxonMobil must pay $819 million in unpaid royalties for oil previously produced by its consortium in Chad. On top of that, the court slapped the company with a fine of $74 billion -- around five times Chad's annual gross domestic product. The proposed fine and royalties will only add to the strain between the Chadian government and international oil companies. But instead of trying to collect its payment, N'Djamena will likely use it as leverage over ExxonMobil in renegotiating its contracts with the company's consortium, a strategy it often uses to strengthen its control over oil revenues....

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