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Last Updated: Friday, 3 October, 2003, 11:42 GMT 12:42 UK
Chad hopes for oil wealth
By Martin Plaut
BBC World Service Africa editor

Map of proposed pipeline project
The pipeline will enable Chad to sell oil to the world

The fortunes of the people of Chad, one of the world's poorest countries, are set to be transformed by a huge and lucrative oil pipeline that will transport oil from the country's new oil fields to a teminal off the coast of neighbouring Cameroon.

From there, tankers will ship the fuel to the world markets, thereby bolstering West Africa's role as an alternative fuel source to Saudi Arabia and the Gulf.

Such reduced dependence on oil from the Arab states was one of the key objectives of President George W Bush's African tour earlier this year.

Local benefits

The 1,070 km pipeline will transport 250,000 barrels a day from Chad through Cameroon.

Chad is a country with divisive conflicts. That is why we have put in place such an elaborate system of revenue management
Ali Khadr
Chad country director
The World Bank
In total, the project should bring in $13bn over the next 25 years, assuming the oil price does not fall below $15 per barrel.

If the oil price remains at current levels, earnings could almost double.

Of that, Chad's share is set to be at least $2bn, and this should help lift the income per head in the country from $250 a year to $550 a year by 2005, according to a World Bank estimate.

Cameroon will also earn about $500m from the project.

"We have taken unprecedented steps to ensure local communities will benefit from the oil revenues," said Ali Khadr, country director for Chad at the World Bank which has helped fund the $3.7bn project.

Divisive conflicts

In the past, the World Bank has been under fire for failing to put safeguards in place to ensure its cash injections end up in the right hands.

The pipeline being constructed
The pipeline will pump $2bn into Chad's undernourished economy
Petro-dollars have a reputation of ending up in the pockets of the rich or funding regional wars.

Indeed, $5m of the bonus paid to the Chadian Government when the pipeline-deal was signed went on the country's battle against rebel groups.

To prevent this the World Bank has dictated that most of the cash will be kept in a London account and subjected to close scrutiny.

"Chad is a country with divisive conflicts. That is why we have put in place such an elaborate system of revenue management," said Mr Khadr.

Community groups and trade unions will help oversee the spending.

It is, said the Bank, a model that can be applied in other African developments.

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