Cameroon, Chad Renegotiating Transit Oil Fees

Source: Reuters 9/23/2009, Location: Africa

Cameroon and Chad have begun renegotiating oil transit fees on a key pipeline after Cameroon complained it was not benefiting from early windfalls from the project, a senior local oil executive said on Wednesday.

The 620-mile (1,000 km) Chad-Cameroon pipeline has from 2003 brought oil pumped by an Exxon Mobil-led consortium in land-locked Chad through to the Atlantic Coast at a rate of some 130,000 barrels a day.

But Cameroon wants the transit fee of 41 U.S. cents per barrel it negotiated at the start of the project to be revised upwards to reflect sharp rises in the price of oil since, a senior official of Cameroon's state oil company SNH said. "Cameroon wants that the transit fee be raised to $1 a barrel, or failing this, the two parties should agree on a formula that the transit fee reflects fluctuations in world oil prices," said the official, who declined to be identified. Negotiations have been sanctioned by Cameroonian President Paul Biya and Chadian counterpart Idriss Deby, the official said.

The pipeline was built with the backing of the World Bank under a landmark agreement aimed at ensuring transparency, but last year the Bank pulled out, saying Chad had not honoured commitments to spend profits on programmes for the poor.


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