CHAD-CAMEROON

PIPELINE PROJECT

Presentation Flow

Project History

1970 consortium of oil companies discover oil in Chad

Consortium consisted of Conoco, Chevron, Exxon & Royal

Dutch/ Shell

1979 field development suspended due to civil unrest

Conoco withdrew & Chevron sold its stakes to Elf Aquitaine

1996 Consortium signs MOU with both governments

1999 Shell & Elf drop out

Petronas & Chevron joined ExxonMobil to form the final

consortium Exxon (40%), Petronas (35%) & Chevron
(25%) stakes

Project
Description

Project Cost - $ 3.7 bn

Field System ($ 1.5 bn)

Construction of 300 wells,
treatment facility & operations
center
To be owned by joint venture
known as Upstream Consortium
Probable reserves of ~ 917
million barrels
Corporate finance chosen for
field system

Export System ($ 2.2.bn)

Construction of 1070 km
pipeline
TOTCO & COTCO own the
Chad & Cameroon portion of the
pipeline respectively
Sponsor agree to buy output at
market rate till production ends
Project finance chosen for
export system

Corporate structure
Govt. Of Chad

Upstream Consortium

Govt. Of Cameroon

5%

Tchad Pipeline Co.

(TOTCO)

10%

89

85%

11%

100%

Private Sponsors
(Exxon/Petronas/Chevron)

Cameroon Pipeline co.

(COTCO)

Financial structure
Project Cost - $ 3723 mn

Host countries were financed by IBRD & EIB through loans of $ 77 mn &
42 mn respectively

Benefits & Roadmap

Benefits from the project

Opportunity to stimulate economic development in Chad (one of the
poorest countries)
The project will increase Govt revenues by nearly 50% which can be used
for poverty reduction programs
High profitable sourcing ( ~$11/ barrel) of crude oil for the consortium

Project Returns

Why World Bank

Provide security to the sponsors given the volatile nature of the

region

Extensive experience in lending & policy with developing countries

WBs involvement would ensure:

Host countries receive their returns
Help jumpstart Chads economy
Protect environment & indigenous people

In absence sponsors might look for safer options

Ensured $77 mn lending from IBRD

Revised sponsors plans to address key issues

Revenue Management Plan

Developed by World Bank for Chad government

Ensure oil revenue not used for economic distortion,
corruption etc.

Chad receives $1.8 bn as revenue taxes represent 16% of it

Govt. To spend tax revenue as per discretion royalties & dividends

to be deposited in Special Petroleum Revenue Account

10% of remaining to finance poverty reduction programs

85% of remaining deposited in Chadian national bank for
development of education, health, rural, infra & environment
15% for development in Doba region

RMP Control & Oversight

Multi level checks & balances developed by World Bank

Annual expenditure program of govt. To be reviewed & approved by

oversight committe