Exxon Negotiating With Chad Over Court-Imposed $74B Fine
Exxon Mobil (NYSE:XOM) is in talks with Chad’s government concerning a huge US$74-billion fine it had been ordered to pay last month by a Chad court for failing to meet tax obligations and withholding royalties, a lawyer for the company told Bloomberg in an interview on tuesday.
Last month, the high court of Chad ruled that an Exxon-led consortium pay the sum, that is way higher than the country’s gdp of US$10.8 billion last year.
Experts say the chance that Chad could collect what it believes are its dues is beyond remote.
Exxon has appealed the court ruling, however the appeals court hearing has been postponed as a result of talks are being held, Bloomberg quoted Exxon lawyer Thomas Dingamgoto as saying.
According to the Chad government’s general director of legal affairs, Fang Langou Operal, the fine imposed on Exxon is compatible with a customs code of the Central African Economic and monetary Community (CEMAC), of that Chad could be a member.
Chad’s contention is that the Exxon-led consortium ought to pay 2 % in royalties on crude exports, whereas Exxon has said it had a convention signed with the government to pay only 0.2 % in royalties. Government official Operal, however, told Bloomberg these days that the convention has not been either ratified by parliament or signed by the head of state.
Exxon entered the central african country in 2001, and 2 years later struck oil. this daily production rate is concerning 120,000 barrels, a lot of of that is being exported via a pipeline through neighboring Cameroon to the West African coast.
Earlier this year, Exxon and its partners within the consortium, including Malaysian Petronas, filed a case at the International Court of Arbitration in Paris against the Chadian government, claiming their contract for oilfield development included an exemption from export taxes.