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Last Updated: Tuesday, 15 July, 2003, 16:05 GMT 17:05 UK
Africa's mammoth oil project comes of age
The pipeline being constructed
The pipeline is more than 1,000km long
One of Africa's most ambitious - but typically controversial - oil projects came to fruition on Tuesday, when Chad began pumping oil for export via Cameroon.

The total cost of extracting the oil from Chad and piping it to Cameroon is estimated at $3.7bn (2.2bn), one of the biggest investments ever made in the region.

When production gets up to full speed next year, this one project alone is expected to account for 45-50% of Chad's national budget.

The Chadian government has already welcomed the first flow of oil from wells in the south of the country.

The income from the oil should provide annual revenues of $80m for Chad and $20m for Cameroon.

But international charities are already concerned that, as in the oil-rich countries of Nigeria and Angola, the money earned will not filter through to poor people.

Ten year process

Consultations on the project began ten years ago, when the entire 1,070 km course of the pipeline was assessed by experts travelling on foot.

Map of proposed pipeline project
Almost 1,000 village-level meetings were held, including 165 consultations with Pygmies in Cameroon, and the pipeline's original route was altered 20 times.

It will take the oil two months to travel the length of the pipeline, with the first oil tanker not expected to load until the autumn.

But the giant project, funded by Exxon Mobil and the World Bank, has been dogged by controversy from the start.

In 1999, Anglo-Dutch Shell and France's Elf pulled out of the project without explanation.

Criticism

In 2000, the government admitted diverting $4m of the pipeline's investment funds to buy weapons for use in its war against northern rebels.

The construction of the pipeline has also been strongly criticised by environmentalists.

Chad was recently ranked the most corrupt of 21 African countries in a survey on good governance criteria by Transparency International.

And the International Monetary Fund last month demanded early repayment of a loan from Chad, saying the government provided false information in order to get the money in the first place.

To counter scepticism over how the oil revenues will be managed, Chad has passed a law under which 80% of the income will be used to finance education, health, environment, water and rural development.

Another 10% of the income must be deposited in an international bank for the benefit of future generations, while a further 5% will be used to benefit the local population of the Doba basin, where the oil is drilled.

The Nigerian government's failure to plough oil revenues back into the villages nearest is oil developments has been the main cause of recent unrests and riots there.

But despite the financial safeguards in place in Chad, charities remain sceptical that the project can help overcome the extreme poverty facing many of the country's eight million people.


WATCH AND LISTEN
World Bank's Jerome Chevallier
"The oil revenues will be fully audited and fully transparent."



SEE ALSO:
The hotspots of African investment
29 Aug 02  |  Business
Chad set for oil production debut
29 Nov 02  |  Business


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