Date: Fri, 25 Apr 97 10:15:36 CDT
From: rich%pencil@cmsa.Berkeley.EDU (Rich Winkel)
Subject: Oil Companies' Plans Could Lead To Disaster In Central Africa

/** headlines: 181.0 **/
** Topic: Oil Companies' Plans Could Lead To Disaster In Central Africa **
** Written 9:33 PM Apr 24, 1997 by econet in cdp:headlines **
/* Written 11:44 AM Apr 23, 1997 by in */
/* ---------- "OIL COMPANIES' PLANS COULD LEAD TO" ---------- */

From: (WWW Administrator)

Oil Companies' Plans Could Lead To Environmental Catastrophe and Social Unrest in Central Africa

Friends of the Earth press release. 23 April, 1997.

Oil company documents obtained by Friends of the Earth and released today reveal that a consortium of Shell, Exxon and Elf are planning to open new oil fields in the politically and environmentally sensitive Doba region of southern Chad [1]. The companies intend to partly finance their venture with 'corporate welfare' provided by the World Bank [2]. Campaigners have drawn parallels with the situation in Ogoniland, Nigeria [3] and fear that the proposed oil developments will set the scene for environmental damage and social unrest.

The Doba region has long been the seat of an ethnic and regional struggle against Chad's central government and the promise of huge oil wealth risks restarting violence in the region. The pipeline will be built through sensitive rainforest areas, including places where hunter-gatherer tribes live, and will inevitably open up previously inaccessible forests to unplanned settlement, forest clearance, poaching and the risk of pollution incidents. Friends of the Earth believes that the Governments of Chad and Cameroon (through which the proposed pipeline would run for most of its length) will lack both the political will and the financial resources to ensure effective environmental protection.

Tony Juniper, Campaigns Director at Friends of the Earth, said:

"A potential environmental and social disaster is planned for central Africa, and its going to be part funded by the taxpayer. If Shell and the others believe this new oil field is such a good idea, then why are they asking the World Bank for these huge subsidies?"

"If aid money is available for this region, it should be put into socially and environmentally beneficial programmes that help poor people. Millions of dollars of corporate welfare for multinational oil companies is likely to do more harm than good to the communities and environment in this sensitive region".


[1] Documents written by the oil companies proposing the Chad and Cameroon oil developments (entitled Exxon's Chad Doba project ) set out plans for 287 production wells, more than 1000km of buried 30 inch diameter pipeline (mainly running through Cameroon to the coast), 4 12,000 BHP pumping stations, 500km of road upgrades, 4 locomotive upgrades and offshore tanker facilities. Production is expected to be in the order of 225,000 barrels per day. The consortium (40% Exxon, 40% Shell and 20% Elf) is seeking 30 year production concessions and is negotiating joint venture arrangements with the host countries of Chad (where the production fields are) and Cameroon (through which most of the pipeline will travel).

[2] The World Bank is an international development finance organisation that makes loans to developing nations. Whilst its work has historically focussed on providing finance to government development programmes, its lending is increasingly linked to private sector investment. The oil company documents held by Friends of the Earth show that the consortium of Exxon, Shell and Elf expect a total of US$350 million to be lent to the Chad and Cameroon governments for investment in the project. Because of the political and economic signals that World Bank involvement will send and because of the reduced financial risks to the companies that its support will bring, the oil consortium "consider significant World Bank participation a prerequisite for going forward with the project".

[3] Following the environmental and human rights abuses that have accompanied oil development in Ogoniland in Nigeria, serious social and environmental risks can be anticipated in south-western Chad. The Doba region in southern Chad has long been the seat of an ethnic and regional struggle against Chad's central government which is closely associated with the government of neighbouring Sudan, a country that the US accuses of supporting terrorism. The promise of oil wealth in the south risks re-igniting the smouldering tensions with fresh demands for a federalist state and renewed violence. An indication of the Chad Government's political and financial acumen is given by foreign donor agencies refusal to trust the President of Chad with the nation's finances; the country's Treasury was under the control of a Swiss firm for several years.