Chad extends deadline for frozen oil funds release

By Daniel Flynn

N’DJAMENA (Reuters) – Chad has pushed back until the end of
April a deadline for halting oil production in a dispute with
World Bank over frozen Chadian oil royalties, the government
said on Monday.

Chad had threatened to stop its oil output unless the World
Bank released the funds or a U.S.-led oil consortium operating
in the central African country paid out at least $100 million.

A Chad government statement said it would relax the
deadline, originally set for midday Tuesday, because it had
accepted a U.S. government offer to mediate in the dispute.

“The government is happy to accept the American
government’s offer of mediation and has decided to grant the
time proposed for this mediation by the State Department, that
is, until the end of April,” the statement, read on state
radio, said.

It said the top U.S. diplomat for Africa, Assistant
Secretary of State for African Affairs Jendayi Frazer would
travel to N’Djamena for talks, but did not specify when.

Chadian President Idriss Deby dragged oil to the center of
his country’s political crisis on Friday by announcing the
deadline for either the World Bank to unfreeze the royalties
payments or for the U.S.-led oil consortium to pay up.

The government said it had asked the companies involved in
Chad’s oil production, U.S. oil majors Exxon Mobil and Chevron
and Malaysia’s Petronas to put the money directly in the state
treasury account.

The announcement came a day after an assault by rebels on
the capital N’Djamena in which several hundred people were
killed.

It was the boldest attack yet by insurgents who have vowed
to end Deby’s nearly 16-year rule over the landlocked country.
The rebels are also trying to disrupt a May 3 presidential
election in which Deby is standing for a third term.

The oil royalties have been frozen for five months in a
dispute with the World Bank after Chad changed an oil revenue
law which earmarked a share of oil revenues for social spending
for future generations.

Deby has said Chad needs to access oil revenues more
quickly to help bolster national security to face attacks from
rebels and the spillover of war in neighboring Sudan’s Darfur
region.

As well as freezing an escrow account containing the oil
royalties, the World Bank suspended loans to Chad on January
12, saying the government had breached an agreement with the
bank when it changed the oil revenue law.

The agreement — originally touted by the global lender as
a test case in Africa to show how oil profits could fight
poverty — was meant to ensure 10 percent of revenues were
saved in a special fund to help future generations.

The bank pressed Chad to pass the original oil revenues law
in exchange for funding for a $3.7 billion pipeline which
carries crude 1,000 km (620 miles) from the landlocked country
to the Gulf of Guinea for export.

(Additional reporting by Betel Miarom)