Oil in Chad
Useful stuff, maybe, for once
A novel scheme to extract oil without fuelling corruption or bloodshed
ALMOST every African nation blessed with copious minerals is also cursed with some form of civil unrest. Rebels, regular armies, and sometimes foreign armies too, slug it out for control of oil or diamonds. Nor does natural wealth promote good governance. A regime with oil is less accountable to ordinary citizens; it does not have to collect their trifling taxes or meet their tedious demands. A portion of the petrodollars must be spent on the army to keep the masses in line, but the rest can be split among the political elite.
But not, it is now hoped, in Chad, where the World Bank has devised a new scheme to ensure that oil profits are spent wisely. The stakes are high: a consortium led by ExxonMobil has just started pumping oil in the country's Doba basin, and the government's oil revenues are expected to reach $80m-$140m after 2003. What is novel about the plan is that the consortium will not pay the money directly to the Chadian government. Instead it will go into an offshore account. To get it, the government will require consent from an independent committee, which has to co-sign all cheques, and will do so only if the government spends the money on health, education or basic infrastructure.
The World Bank sees the scheme as a model for how oil firms can function in unstable parts of Africa. Many are eager to diversify out of the Middle East, and so have an eye on Africa's vast untapped reserves. In the past, firms have tended to make under-the-table deals with corrupt African leaders and then claim that, as private companies, they cannot be held responsible for how the governments they bankroll spend the cash. It is not an absurd argument—no oil firm has the power to bring peace to Sudan or to clean up Nigerian politics. But under pressure from activists, some companies are trying to exert a bit of influence. BP, for example, tried last year to promote transparency in Angola by revealing how much it paid to the thoroughly corrupt government there.
In Chad, ExxonMobil agreed to work with the World Bank, and to submit to its stern demands for transparency and accountability. It thus hopes to placate environmental and human-rights lobbyists, who have been loudly critical of the project. ExxonMobil says that its pipeline, which stretches 1,000km (600 miles) through virgin rainforests to the coast of Cameroon, is the largest-ever private infrastructure investment in sub-Saharan Africa, costing $3.7 billion. The oil company, which faces plenty of risks on the ground in Chad, does not want the pipeline to become a global public-relations disaster.
Even before they had oil to fight over, Chadians had been at war with one another almost constantly since independence from France in 1960. Hissène Habré, a president of Chad in the 1980s, tortured and killed tens of thousands of his own people, stopping only when overthrown, in 1990, by General Idriss Déby. Mr Déby is still in charge, having rigged a presidential election last year. His government and army are dominated by Muslim northerners, mostly from his own tribe.
Better than fighting each other
Various groups continue to rebel against the regime, but fighting in the Christian and animist south, where the oil is, has eased since 2000, when the army killed the main southern rebel leader. Southerners are still fractious, but now direct their complaints mostly at the oil firms. The arrival of hordes of well-paid expatriates has caused prices of basic goods to soar to levels many locals cannot afford. The oil firms do provide jobs, but only about 3,000 of the 10,000 workers on the project are Chadians, and most will be laid off when the pipeline is completed next year. In the meantime, schools are finding it harder to function because teachers are taking better-paid jobs with the oil company. There are frequent strikes as well as reports of sabotage.
ExxonMobil is spending $8m to compensate those living along the pipeline and has agreed to a slew of social and environmental conditions set by the World Bank and others. Environmentalists still complain that the pipeline will damage the Cameroonian rainforest, and other worries remain. The pipeline will be able to withstand a fair amount of unrest, not least because it is being laid underground.
But many doubt the government's good intentions. Its first taste of oil money, in 2000, was spent largely on arms. Mr Déby's excuse was that he was facing a fresh rebellion in the north. Were a rebellion to occur in the future, a little-discussed clause in the revenue-sharing agreement would allow him, once again, to splash out on weaponry. Even so, the World Bank insists that Chad, unlike its neighbours, will put the bulk of its oil windfall to better use. "Chad has to be different," says one World Bank official, "because we're staking our reputation on it."
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