Chad nationalizes Exxon Mobil assets sold to British-listed energy firm

By James Tasamba

KIGALI, Rwanda (AA) - Chad’s parliament approved a government bill Wednesday nationalizing all assets belonging to Exxon Mobil.

The move came months after the oil company closed the sale of its operations in Chad and Cameroon in December last year to British-listed Africa-focused oil and gas energy company, Savannah Energy, in a $407 million deal, which was contested by the Chadian military government.

A total of 172 lawmakers backed the law to nationalize the assets out of 175.

With the legislation of the assets, prospection rights, operating permits and oil-transport authorizations held by Esso Exploration and Production Chad Inc. “are nationalized.”

Petroleum and Energy Minister Djerassem Le Bemadjiel told lawmakers during the debate that the controversial decision was made after ExxonMobil ignored the conditions provided for in the various agreements signed with the government.

“The government could not accept the sovereignty and general interest of the Chadian State to be flouted. It has therefore decided to nationalize all the assets and rights of the Esso-ExxonMobil group,” he said.

Esso-ExxonMobil has been operating in the West African country for decades.

Le Bemadjiel acknowledged that with its operation “the country has experienced an undeniable economic boom.”

But he added: “Savannah and Esso-ExxonMobil have taken actions that pose serious and immediate threats to public order in Chad as well as to all actors in this economic sector that is crucial to the stability and development of Chad.”

Savannah Energy said last week it would take a legal course to challenge Chad's move to nationalize its assets.

Savannah owns a 40% interest in the Doba Oil project in southern Chad, which has seven producing oilfields with combined output of 28,000 barrels per day.​​​​​​​