The Chadian government has announced that it has nationalized all assets and rights, including hydrocarbon permits and exploration and production authorizations, that belonged to Exxon Mobil’s subsidiary in the country.
The move comes after Exxon Mobil closed the sale of its operations in Chad and Cameroon to London-listed Savannah Energy in a $407 million deal in December.
However, the Chadian government contested the agreement, stating that the final terms were different from what Exxon Mobil had presented. It warned that it may ask courts to block Savannah’s purchase of Exxon’s assets in the country and take further steps to protect its interests.
The nationalized assets include a 40% stake in Chad’s Doba oil project, which comprises seven producing oilfields with a combined output of 28,000 barrels per day. It also includes Exxon’s interest in the more than 1,000 kilometer Chad/Cameroon pipeline from the landlocked nation to the Atlantic Gulf of Guinea coast through which its crude is exported.
Exxon Mobil and Savannah Energy were not immediately available for comment on the matter.
This move by the Chadian government is not entirely surprising given the controversy surrounding the sale of Exxon Mobil’s assets to Savannah Energy. It remains to be seen what actions the government will take to protect its interests and whether Savannah Energy will be able to proceed with its purchase of Exxon’s assets in Chad.
The nationalization of Exxon Mobil’s assets in Chad is part of a broader trend of governments taking greater control of their natural resources. Many countries in Africa and beyond have been pushing for greater control over their resources and a larger share of the profits generated by foreign companies operating in their territories.
As natural resources become increasingly important in the global economy, it is likely that we will continue to see governments taking a more assertive approach to the management of their resources. The challenge for companies like Exxon Mobil will be to navigate these complex and evolving political landscapes while also delivering value to their shareholders.