SackAttack
08-27-2006, 12:47 AM
http://www.cnn.com/2006/WORLD/africa/08/26/chad.oil.reut/index.html
Chad ordered U.S. energy giant Chevron and Malaysia's Petronas on Saturday to leave the country within 24 hours for failing to honor tax obligations, in a move apparently motivated by a desire to earn more from its oil.
Under the 1988 agreement with the foreign consortium, Chad gets 12.5 percent of the wellhead value of total production, before quality discount and the cost of sending it through the pipeline to Cameroon's Kribi terminal.
"Despite the rise in the price of a barrel, now estimated at around $70, Chad doesn't get much from its oil revenues," Deby told the meeting with government ministers and political parties.
"In less than three years of exploitation the consortium has earned $5 billion for a $3 billion investment. In contrast, Chad has just received crumbs: $588 million, just 12.5 percent."
A Transparency International survey last year ranked Chad the world's most corrupt state.
So, um. Let me get this straight. An 18-year-old agreement set 12.5 percent as the standard, which by Deby's own words, Chad has been receiving.
Presumably, since they've been receiving their commission, the issue of "corporate tax obligations" is a non-starter, unless they're supposed to be paying taxes on top of the 12.5%. Unfortunately, the CNN.com reporter really didn't do much in the way of outlining what these obligations are supposed to entail beyond the 12.5% commission, let alone whether they in fact do extend beyond that point.
So they made an agreement, which has apparently been honored over the years, but that's not enough for Chad. They've dismissed the ministers involved with the contract for telling the oil companies not to pay (huh?), they've booted two of the partners out of the country and called the original agreement a "fool's agreement." They want to renegotiate it (at the point of a governmental gun, I'd imagine, given the creation of a national oil company).
But this is an issue of Chevron not paying its taxes rather than the most corrupt government on the planet (according to the Transparency International survey) reneging on an 18-year-old contract?
Chad ordered U.S. energy giant Chevron and Malaysia's Petronas on Saturday to leave the country within 24 hours for failing to honor tax obligations, in a move apparently motivated by a desire to earn more from its oil.
Under the 1988 agreement with the foreign consortium, Chad gets 12.5 percent of the wellhead value of total production, before quality discount and the cost of sending it through the pipeline to Cameroon's Kribi terminal.
"Despite the rise in the price of a barrel, now estimated at around $70, Chad doesn't get much from its oil revenues," Deby told the meeting with government ministers and political parties.
"In less than three years of exploitation the consortium has earned $5 billion for a $3 billion investment. In contrast, Chad has just received crumbs: $588 million, just 12.5 percent."
A Transparency International survey last year ranked Chad the world's most corrupt state.
So, um. Let me get this straight. An 18-year-old agreement set 12.5 percent as the standard, which by Deby's own words, Chad has been receiving.
Presumably, since they've been receiving their commission, the issue of "corporate tax obligations" is a non-starter, unless they're supposed to be paying taxes on top of the 12.5%. Unfortunately, the CNN.com reporter really didn't do much in the way of outlining what these obligations are supposed to entail beyond the 12.5% commission, let alone whether they in fact do extend beyond that point.
So they made an agreement, which has apparently been honored over the years, but that's not enough for Chad. They've dismissed the ministers involved with the contract for telling the oil companies not to pay (huh?), they've booted two of the partners out of the country and called the original agreement a "fool's agreement." They want to renegotiate it (at the point of a governmental gun, I'd imagine, given the creation of a national oil company).
But this is an issue of Chevron not paying its taxes rather than the most corrupt government on the planet (according to the Transparency International survey) reneging on an 18-year-old contract?