Chad Suspends CNPC Unit over Environmental Violations

Source: Reuters 5/23/2014, Location: Africa

Chad has suspended all exploration and drilling activities of the local unit of China National Petroleum Corporation for failing to take measures to meet environmental standards in its operations, its oil minister said.

"Despite a first suspension imposed on the company in August 2013, unacceptable practices such as land-filling polluted sites without cleaning them, has continued," oil minister Djerassem Le Bemadjiel said in a statement.

He said CNPC has been notified of the suspension of its activities across Chad until further notice. No CNPC official was immediately available to comment.

Chad suspended CNPC's activities in August, accusing it of intentionally spilling crude during drilling operations to reduce cost, and not taking adequate clean-up steps.

It lifted the suspension in October saying the company had improved its practices.

Chad's environment minister, however, fined the local unit CNPCIC (CNPC International Chad) $1.2 billion in March for repeated environmental violations and damages.

Chad became a crude producer in 2003 and production peaked at about 176,000 barrels per day in 2005 before declining primarily due to ageing wells in the country's Doba oil field.

CNPC has been operating in Chad since 2003 and recently won rights to begin exploration on new blocks in the south of the Central Africa state.

The government shut down their joint venture 588-million-euro ($780 million) 20,000 bpd refinery for several weeks in January 2012 in a row over retail prices for the local market.


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