MoU on $ 3 bn Chad development, more to come

Nov 22, 1996 01:00 AM

Exxon has announced that a Consortium headed by its Esso Exploration and Production Chad, has signed a MoU with the Government of Chad on development terms that represent an important step leading to the first commercial oil production in that country. The MoU addresses key financial, legal and operating terms under which the Doba Basin project in southern Chad would be developed. The project area, located about 350 miles south of Chad's capital, N'Djamena, is estimated to contain approximately 900 mm barrels of recoverable reserves. The total cost of developing the reserves and the infrastructure needed to transport them is expected to be in the range of about $3 bn. Esso is operator for the Consortium and holds a 40 % interest, while Societe Shell Tchadienne de Recherches et d'Exploitation and Elf Hydrocarbures Tchad hold 40 % and 20 % interests, respectively. Remaining milestones include final government ratification of terms and the securing of project financing. The Consortium will already invite proposals from potential bidders for the major engineering, procurement and construction contracts. The Doba Basin Project will draw on reserves from three oil fields in southern Chad. Approximately 300 wells will be drilled, with peak production projected to be about 200-250,000 bpd beginning as early as the year 2000. This production would be gathered into a central treating facility located in the field area. The oil would then be transported approximately 650 miles via a 30-inch pipeline across Chad and the neighbouring Republic of Cameroon to the Atlantic coast. The Presidents of Chad and Cameroon recently signed a Bilateral Treaty which established the basis for construction and operation of this pipeline. Commercial tankers would then be loaded from an offshore marine terminal near the town of Kribi, Cameroon, to carry the oil to world markets. The MoU also outlines a second potential project in Chad. This project would call for development of the Sedigi field north of Lake Chad and a pipeline to supply a refinery to be built in the capital city of N'Djamena and to be operated by Societe d'Etude et d'Exploitation de la Raffinerie du Tchad. The refinery would produce fuel for transportation, electric power generation and other uses.

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