Chad slams Exxon Mobil with fine 7 times its GDP

chad
Chadian workers guide a pipe down a well in the Doba oil fields in southern Chad where a $3.7-billion project was officially inaugurated Friday Oct. 10, 2003 that will produced 250,000 barrels a day in the central African nation, one of the world's five poorest. The oil is being shipped through a 1,000-kilometer, 620-mile pipeline through neighboring Cameroon to the Atlantic port of Kribi. Chad's 12.5 percent share of the revenue from the Exxon Mobil-led project will go directly into an escrow accountof which 80 percent is to be used to finance education, health and infrastructure projects under a World Bank conceived plan.(AP Photo/Susan Linnee)

The government of Chad is currently at loggerheads with Oil giants, Exxon Mobil. This is coming after a court in Chad’s capital of N’Djamena announced in a ruling Oct. 5 2016 that Exxon should pay $76 billion in fines for tax evasion.This figure is 7 times the GDP(gross domestic product) figures of Chad in 2015.

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The oil company’s problems began after a complaint from Chad’s Ministry of Finance that a consortium led by Exxon hadn’t met its tax obligations. Spokesperson for EM, Todd Spitler had this to say;

“This dispute relates to disagreement over commitments made by the government to the consortium, not the government’s ability to impose taxes.Contract sanctity and respect for the rule of law are core principles used to manage our business over the long term. It is vital for all parties to honor the terms of a contract and abide by applicable law in order to achieve the desired long-term benefits envisioned when projects begin.”

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Spitler also revealed that the company was evaluating ‘next steps’ to take. The Chadian government is also demanding $819 million in royalties from Exxon.

Chad produces 160,000 barrels of oil per day. Exxon manages oil fields and operates and hat transports crude oil to Cameroon for export.

 

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