Chad–Cameroon Oil Pipeline

This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.

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Chad-Cameroon Oil Pipeline is an operating oil pipeline in Central Africa.

Location

The pipeline runs from Doba Basin, Chad, to Kribi, Cameroon.

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Project details

• Operator:
• Owner: Savannah Energy PLC [40%]; Petronas [35%], Government of Chad [25%]
  • Previously: ExxonMobil [40%]; Petronas [35%], Government of Chad [25%]
• Parent company: Savannah Energy PLC [40%]; Petronas [35%], Government of Chad [25%]
• Capacity: 225,000 bpd
• Length: 1,070 km
• Oil source: Doba Oil Field
• Status: Operating
• Start year: 2003
• Cost: US$4.2 billion

Background

The pipeline transports oil from the Doba Oil Field in southern Chad to a floating export facility at Kribi, Cameroon, in the Gulf of Guinea. From there the oil is shipped to a floating storage and offloading vessel, 7 miles (11 km) offshore, for export to world markets. The pipeline has a capacity of about 225,000 barrels per day.

The project was one of Africa's largest public-private partnerships at the time and took upwards of $3.7 billion in investments. The pipeline's construction began in 2000 and was completed in 2003. At the time, it was also hailed as the best method to reduce the poverty in Chad even though it was opposed by over 80 environmental and human rights groups during its construction due to political, economic, social, and environmental concerns Since oil began flowing, the project has been steeped in controversy and problems ranging from socio-economic and political issues to environmental concerns and human rights abuses.

According to Cameroon's national oil company, Société Nationale des Hydrocarbures, in 2019 the pipeline transported 47 million barrels of oil, and generated about $60 million in fees for Cameroon.

Ownership and Financing

The project started as a joint venture among ExxonMobil (40%), Petronas (35%), Chevron (25%), and both the governments of Cameroon and Chad at 1.5% each. However since then, due to an unstable relationship between Chevron and the government, the oil company sold its 25% share to the Republic of Chad for $1.3 billion. The financing of the buyout was underwritten by Glencore Xstrata who also owns 90% of the market exporting rights of Chad's oil.

The mega-project received most of its funding from various financial institutions such as The World Bank, European Investment Bank, COFACE (France), ABN Amro (Netherlands), Calyon (Thailand), and the Import-Export Bank of the United States, among others. The World Bank dropped out in 2008 and demanded repayment of its loan due to disagreements.

As of March 2020, both ExxonMobil and Petronas were reported to be seeking to sell their shares in the project.

On 9 December 2022, ExxonMobil sold its shares to Savannah Energy PLC of the UK. This includes ExxonMobil's 40% stake in the Doba oil project, this pipeline, and an oil export terminal. Soon thereafter, the Chad government nationalized the acquired assets, which led to arbitration in an international court. Savannah initially intended to purchase Petronas' shares of the assets as well, but that plan was cancelled.

Opposition and Controversy

The massive oil pipeline project was opposed on many fronts, from environmental and human rights groups to groups simply fighting against their displacement and loss of grazing and farming lands in the path of the pipeline. A total of 22,000 people would be affected by the pipeline's construction. Many advocates and NGOs from around the world protested the World Bank's involvement in the project due to President Idriss Deby's poor humans rights records. With rebellions stirring around the land-locked nation, many felt that loans from investors would not only go in to the pockets of corrupt officials, but also towards weapons. This in fact occurred when reports surfaced of Chad using $4 million from the loan program to procure weapons.

In 2006, President Deby argued for oil revenue to be used for his army. The World Bank this time obliged, but stipulated that 70% of the oil revenue must still go to social and infrastructural development. Ultimately, civil strife and rampant corruption in the government created worsening conditions for the people of Chad. As time continued, it became apparent that much of the revenue from the oil project would not make it these development projects. The World Bank would eventually leave the pipeline project, but other financial institutions and companies have remained in the project.

Other groups, such as Bagyéli or the Bakola Pygmies as they are known, located on the coastline of Kirbi in Cameroon, had their land directly in the path of the pipeline. The Bakola pygmies' entire way of life would be disrupted as the pipeline's construction would irreversibly alter the ecosystem they rely upon. The group was left out of any consultation and were poorly informed of the details of the pipeline, while receiving very little in compensation once the pipeline was constructed. Other advocates worried that the pipeline's effects on the Bagyéli's land would only intensify their discrimination in Cameroonian society.

Spills

The spill occurred at the floating terminal at the port of Kirbi off the coast of Cameroon. According to officials, the spill was minor, but several Cameroonian NGOs criticized the government for its lack of communication with the local population.