Chad extends deadline for frozen oil funds release
Posted on: Monday, 17 April 2006, 04:43 CDT
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)
Source: REUTERS
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