Oil exploration drilling underway

Construction of infrastructure in the controversial US $3.5 billion project that will pump oil from Doba in southern Chad, through a 1,070 km pipeline to off-shore facilities in Cameroon has started and production should begin by 2004, ExxonMobil officials told IRIN on Monday. Limited drilling has been going on since February as part of the exploration process. A total of 300 wells are planned, the officials based in Houston, Texas, added. The project is a joint venture between US oil companies ExxonMobil, ChevronTexaco and Malaysia’s Petronas. Apart from facilities for treating crude oil, a bridge across the M'béré River on the Chad/Cameroon border has been put up. It is estimated that Chad will receive between US $2.5-$5 billion in direct revenues from royalties, taxes and dividends depending on the price of oil over the oilfield’s 30-year life. US $3.5 billion in economic activity will also be generated by local project spending and employment, according to the oil companies. Cameroon expects to receive US $500 million in pipeline transit fees, taxes and dividends over the project’s life, and another US $400 million in economic activity generated by local project spending and employment, the project details estimate. The oil project was approved by the World Bank in June 2000, despite opposition to it both in Chad and Cameroon. The Bank called the project "an unprecedented framework to transform oil wealth into direct benefits for the poor, the vulnerable and the environment." However the project met with strong resistance from Chadian opposition groups under the umbrella of ‘Coordination des mouvements armes et partis politiques de l’opposition’, who strongly condemned the World Bank's decision to fund the project and organised protests against it. International environmental NGOs, such as Action Alert, said it was environmentally dangerous because it would affect forests, land including farmland in southern Chad where most of the country’s food is grown, coastal waters and important regional river systems. [For further details, go to http://www.essochad.com]