Chad's president suspends 3 Cabinet ministers in connection with foreign oil tax dispute

Sunday, August 27th 2006, 10:35 am
By: News On 6

N'DJAMENA, Chad (AP) _ Chad's president suspended the oil minister and two other Cabinet members who negotiated deals with two foreign oil firms that he ordered out of the country for failing to pay taxes, officials said Sunday.

President Idriss Deby suspended the three ministers on Saturday after telling California-based Chevron Corp. and Malaysian company Petronas that they owed Chad $450 million in taxes and should begin making plans to leave, a government official said, speaking on condition of anonymity because he is not authorized to release information to the media.

The two firms are part of an oil production consortium led by Exxon Mobil.

Oil Minister Mahmat Hassan Nasser, Planning Minister Mahmat Ali Hassan and Livestock Minister Mockhtar Moussa were suspended because they negotiated the terms of the agreements with Chevron and Petronas.

The ministers made no public statements Sunday. It was unclear how and when Chad may enforce the expulsion order, which was announced by Deby in a message broadcast on state-run radio.

Petronas said Sunday that it had not received notification of the order. Malaysian Prime Minister Abdullah Ahmad Badawi also said Hassan Merican, the president of Petronas, was trying to obtain more information from the company's office in Chad.

``Let Petronas get the information on how this could have happened,'' Abdullah was quoted as saying by Malaysia's national news agency, Bernama.

Chevron said in a statement Saturday that it had not been behind on any tax payments and had not been told it must leave Chad.

``Chevron has not received any official notification from the Republic of Chad government asking Chevron to leave the country over tax issues,'' the statement said. ``However, Chevron has been in full compliance with all of our tax obligations.''

Mark D. Boudreaux, a spokesman for Exxon Mobil, told The Associated Press by e-mail that neither his company, nor affiliate Esso Chad has been asked to leave the country.

Oil and livestock are the mainstays of impoverished Chad's economy, and the fields overseen by Chevron and Petronas account for some 60 percent of the country's oil production. Deby said Chad would assume their production responsibilities.

Exxon Mobil, along with Chevron and Petronas, had agreed to finance a 660-mile underground pipeline from landlocked Chad to the Atlantic port of Kribi, in Cameroon.

Exxon Mobil has a 40 percent stake in the $4.2 billion pipeline project, while Chevron and Petronas each have 30 percent.

In return, Chad receives about 12.5 percent of the profit made on each barrel exported. The annual profit from the pipeline is estimated at $120 million for the next 25 years.

If the two companies are evicted, Chad could turn for help to China, which is seeking deals with oil-producing countries in Africa and is heavily involved with neighboring Sudan.