Chad’s energy and hydrocarbons ministry has announced that the country has taken over all assets and rights, including hydrocarbon permits and exploration and production authorizations, that were formerly owned by a subsidiary of Exxon Mobil. This decision has caused a dispute with the oil giant as Exxon Mobil had already sold its operations in Chad and Cameroon to London-listed Savannah Energy in a $407 million deal last December.
However, the Chadian government has disputed the agreement and warned of possible legal action to block Savannah Energy’s purchase of Exxon’s assets in the country. Exxon Mobil’s assets in Chad included a 40% stake in Chad’s Doba oil project, comprising seven producing oilfields with a combined output of 28,000 barrels per day.
The nationalization of these assets aims to assert greater control over Chad’s natural resources and may cause tensions with international oil companies operating in the country. The decision to nationalize Exxon Mobil’s assets is part of a larger effort by the Chadian government to increase its control over its natural resources and ensure that the benefits of oil production are more equitably distributed among the country’s citizens.
As Chad and Exxon Mobil continue to navigate this dispute, it remains to be seen how it will impact the energy sector in the country and the broader implications for foreign investment in Chad’s natural resources. This move by Chad highlights the need for foreign investors to carefully consider the political risks associated with investing in countries with unstable political situations and rapidly changing economic landscapes.