Chad high court fines Exxon-led oil consortium $75 billion

By Dany Padire, Associated Press

Chad's high court has ordered an oil consortium led by Exxon Mobil Corp. to pay a fine of more than $75 billion after the country's finance ministry accused it of not paying royalties.

 

N'DJAMENA, Chad (AP) — Chad's high court has ordered an oil consortium led by Exxon Mobil Corp. to pay a fine of more than $75 billion after the country's finance ministry accused it of not paying royalties.

Exxon spokesman Todd Spitler said Thursday that Exxon disagrees with the ruling and is "evaluating next steps."

Chadian officials were not immediately available to comment on the ruling or the fine's size, which is several times the country's GDP. The World Bank says that was about $10.8 billion last year.

"This dispute relates to disagreement over commitments made by the government to the consortium, not the government's ability to impose taxes," Spitler said.

Exxon and its partners, including Malaysian state oil company Petronas, filed for arbitration in July with the International Court of Arbitration in Paris over an exemption from export duties on crude production. They said the exemption was included in the consortium's agreement with Chad.

One of the consortium's original partners, Chevron Corp., said in 2014 that it sold its 25 percent stake for $1.3 billion.

That was just weeks before the price of crude began a deep and long slump, falling from over $100 a barrel to under $30 at one point this year before recently rallying to around $50 a barrel.

Chad is a relative newcomer to the oil industry, becoming a producer in 2003. The U.S. Energy Information Administration estimates the country's output at 120,000 barrels a day, or about 44 million barrels in 2015.

The landlocked country, which remains one of the world's poorest, exports its oil via a pipeline through Cameroon.

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