Friends of the Earth warn against consequences of Chad oil project

Environmental campaign group Friends of the Earth warned that oil development in the Doba region of the central African state of Chad risked reigniting social unrest in the area. "A potential environmental and social disaster is planned for central Africa," said Friends of the Earth campaigns director Tony Juniper. The group also warned that the project could cause environmental damage to ecologically sensitive areas.
A spokesman for Exxon, operator for the project, said such claims were "premature," and said the socio-economic and environmental impact were currently being assessed.
A consortium consisting of Exxon (40 %), Shell (40 %) and Elf (20 %) last November signed a memorandum of understanding with Chad on the finance and legal terms for fields around Doba, some 350 miles (560 km) south of the capital N'Djamena. If the $ 3 billion project gets the green light oil production is expected to start in 2001 and to yield 900 million barrels, or 200,000-250,000 bpd over 15-20 years.
British newspaper reports said Chad will receive some $ 4 billion from the deal, although Exxon puts the royalty and tax revenues at $ 7 billion. Exxon also says Cameroon is expected to receive $ 500 million from its share of royalties on a pipeline running through to the coast. The project would bring the impoverished country -- which by the World Bank's reckoning had a gross domestic product per capita of $ 170 in 1995 -- much needed revenue. But Friends of the Earth warned the project could wreak havoc on the area.
"The Doba region has long been the seat of an ethnic and regional struggle against Chad's central government and the promise of huge wealth risks restarting violence in the region," Friends of the Earth said in a statement.
Chad has problems with North-South, Moslem-Christian strife and oil production around Doba has already been postponed from an original start date in 1998, partly by rebel activities in the area led by Moise Kette, whose group wants an autonomous Christian region in the south.
Friends of the Earth said that the construction of some 287 production wells as well as a 650-mile pipeline to Cameroon's coast would also result in severe environmental damage to the area. "The pipeline will be built through sensitive rainforest areas, including places where hunter-gatherer tribes live, and will inevitably open up the risk of pollution incidents," they said in the statement. The group also questioned the involvement of the World Bank in the financing of the oil development project saying the cash would be better spent on social and environmental programmes. Friends of the Earth said the World Bank would lend $ 350 million the governments of Chad and Cameroon for investment in the project.
Exxon said in a statement that an "environmental assessment is currently under review by the governments of Chad and Cameroon and their consultants. When it is finalised we believe a full and impartial review of the project and its benefits will lead to considerably different conclusions than those expressed by Friends of the Earth." The assessment will be available for review and comment through the World Bank's Public Information Office.
A Shell spokesman said: "This is acknowledged as a technically difficult project and no final decision has yet been taken as to whether it will go ahead, and any decision will be taken in consultation with environmental groups," said the spokesman.