Chinese Contracts revoked and Claim for Fines

Chad has decided to withdraw five exploration permits issued to Chinese oil giant CNPC and press charges in a spat over a US$ 1.2bn fine for environmental violations, the oil ministry said. Oil Minister Djerassem Le Bemadjiel told a press conference late Saturday the move was “to avoid further environmental degradation, not to make place for other companies.”

The China National Petroleum Company was forced to suspend operations in Chad in May after refusing to pay a fine of US$ 1.2bn for “unacceptable practices” that had led to “noxious spills” around drilling sites. The government of the large central African nation also said it planned to press charges against the CNPC both in Ndjamena and in France, whose commercial court has a chamber specialising in international disputes.

“Amicable negotiations are no longer possible. All efforts have been in vain,” government secretary general Abdoulaye Sabre told the press conference. “Next week a government delegation will go to Paris to file a complaint with the commercial court for refusal to pay a fine.” A second complaint has been made in the capital Ndjamena for “environmental degradation and endangering the lives of others”, he added.

Chad, which began exploiting its oil deposits in 2003, has a history of difficult relations with Chinese companies operating on its soil. In March Chadians working for one of these companies went on strike to denounce their working conditions and demand salary increases. According to official statistics Chad produces 120 000 barrels of oil a day in 2011. Oil revenues have allowed the country to modernise its army, improve road networks and public infrastructure.

However parts of civil society are urging the government to use the new oil wealth to improve the living conditions of the population.

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