(AFP) – Feb 5, 2008
PARIS (AFP) — Underlying the Chad conflict is a struggle to control the country's oil resources, which while not extensive are nonetheless vital to the future of one of Africa's most impoverished nations.
"Oil plays an important role" in the current struggle between forces loyal to Chadian President Idriss Deby and rebels determined to drive him from power, said Philippe Vasset, editor of the specialised newsletter Africa Energy Intelligence.
"While the conflict is essentially political, reflecting lingering communal resentments, ... there is also a significant bounty to share."
Nicolas Sarkis of the magazine Petrole et gaz arabes, noting that oil is Chad's principal resource, said "the opposition accuses the government of having sold off the riches of the country."
For Philippe Hugon, a researcher specialising in African economic affairs, "the oil wealth has been partially siphoned off and wasted on arms spending and on building up the personal fortunes of people close to Idriss Deby."
"The rebels want their share."
Under terms of an agreement with the World Bank, Chadian authorities are required to allocate 70 percent of the country's oil earnings to development in exchange for Bank financial support for a 1,000-kilometer (625-mile) pipeline between Chad's Doba oil field and the Cameroonian port of Kribi.
But Chad's major creditors last year complained that Deby's government was not respecting the 70 percent obligation, notably because of an increase in military spending.
Chad pumps 150,000 to 160,000 barrels a day and has reserves estimated at 1.5 billion barrels of crude, numbers that pale in comparison with Nigeria, Africa's top producer, which turns out 2.12 million barrels a day and has reserves of about 36 billion barrels.
Sarkis recalled that before 2003, when oil cost less than 28 dollars a barrel, Chad had trouble financing its energy sector and attracting foreign companies. With no direct access to the sea, the country must rely on costly pipelines.
But with a recent spike in crude prices, Chad is becoming attractive and its oil earnings now carry considerable weight relative to the size of its economy.
Foreign investment in the oil sector in 2004 enabled Chad to reach growth of 30 percent, a pace that fell back to 8.0 percent the following year.
Industry experts believe the country's oil potential remains largely untapped, with new discoveries still possible and with Chad likely to draw serious interest from major consumers such as the United States and China.
The US energy giant ExxonMobil currently heads a consortium responsible for oil extraction in Chad, along with another US group, Chevron, and Petronas of Malaysia.
French group Total, and by extension France, the former colonial power, are not present in the Chadian oil sector.
"American companies have managed to get into the country, to the displeasure of European and Chinese firms," said Sarkis.
He added that for China, which gets 30 percent of its oil from neighbouring Sudan, one possible long-term strategy would be for Chad to build an extension of its pipeline to Sudan.
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