Richard Melson

December 2005

Chad Cameroon Oil

After years of careful planning and environmental study, construction of the Chad/Cameroon Development Project began in late 2000. A workforce of as many as 11,000 people has been developing the oil fields in southern Chad and building the 1070-kilometer pipeline to the coast of Cameroon needed to export Chad's crude to world markets. Construction.

Chad is largely a pre-industrial society with one of the lowest gross national incomes (GNI) per capita in the world, US $200, or about 55 cents per day. According to World Bank statistics, the average Chadian cannot expect to live more than 49 years, and one in five Chadian children dies before the age of five. More facts about Chad and Cameroon.

Latest News:

August 2005 - Project Update #18

Table of Contents and Snapshop Summary (PDF)

Chapter 2 - Production & Construction (PDF)
The project shipped its 100th tanker load of Chad’s crude oil to international markets in April.

- By the end of the second quarter the ttotal had reached 111 shipments to international markets, nearly 103 million barrels.

- As a result, a total of over $276 milllion in oil revenues has so far been paid to the government of Chad through revenue management escrow accounts in London.
Work continued through the first half of 2005 to augment production levels, which have leveled off to an average of about 180,000 barrels per day since the beginning of the year.

- A new small oilfield, the Nya field wiith four wells, was brought online in June and construction was launched on another oilfield, the Moundouli field with 25 wells.

- Drilling crews have also been at work adding wells in the original three fields – Komé, Bolobo, and Miandoum - a process called infilling.

- Engineers have been working to improvee oilfield performance through wireline logging to acquire data on subsurface conditions. They then use the data to apply technical procedures to increase the percentage of oil and reduce the amount of water in the extracted crude oil.

- Exploration continues with a program oof seismic investigation and test well drilling to find additional potential oilfield opportunities for development. One newly discovered field, at Maikeri, is now under study for economic feasibility.

Chapter 3 - Reportable EMP Situations (PDF)
Field monitors recorded a total of 14 Environmental Management Plan non-compliance situations in the first quarter and six in the second quarter of 2005. With only three exceptions, the situations were categorized as Level I situations, the lowest level of noncompliance. One minor spill was also recorded.

Chapter 4 - Safety (PDF)
Project workers have achieved 30 million work hours without a major workplace accident, a span of 18 months without a lost time incident.

- One of the project teams, the drillingg team, has recorded no lost time incidents for more than four years, a total of more than 16 million hours of time on the job. The 1,000 person Chad drilling team has a zero lost time incident record dating from the first day of project drilling.

- The project’s cumulative recordabble incident rate has held nearly steady at 0.39 incidents per 200,000 work hours. This despite an uptick in the rate in the last three quarters.

Chapter 5 - Consultation & Communication (PDF)
The project held 360 public consultation sessions in the first quarter, reaching over 6,600 people. Second quarter consultation sessions totaled 486 and reached another 10,000 people.

Chapter 6 - Compensation (PDF)
Individual land use compensation paid by the project in Chad and Cameroon has reached over 10 billion FCFA ($15.5 million) in cash and in-kind payments.

- A total of 1.15 billion FCFA ($1.8 milllion) was paid in the first quarter of 2005 and another 383 million FCFA ($588 thousand) in the second quarter.

- In Chad, individual compensation distrributed in the two quarters totaled over 898 million FCFA ($1.4 million).

- In Cameroon, individual compensation ppaid in the two quarters totaled 640 million FCFA ($985 thousand).

Chapter 7 - EMP Monitoring & Management Program(PDF)
EMP monitoring and management activities during the first two quarters of 2005 included:

- Work with the drilling team on a propoosed well site at the riverside village of Moundouli, resulting in a decision by the drillers to select a location further away from the river.

- Continued development of a thriving pllanned community at Dompta, near Pump Station 2, established as a mechanism to avoid uncontrolled development outside the Station as the result of in-migration by job seekers and entrepreneurs.

- Inflation monitoring in the oilfield aarea that continues to show prices have held generally steady on basic food basket products such as millet, sorghum, manioc, rice and cooking oil.

- Construction of an enlarged culvert too protect a church from flooding. The church is located on low-lying land outside Kribi, Cameroon, near the road to the Pressure Reducing Station.

Chapter 8 - Local Employment (PDF)
Employment levels rose sharply for the first two quarters of 2005, primarily due to the ramp up of construction for the new Nya and Moundouli oilfield projects. Project employment totaled more than 4,000 workers at the close of the second quarter, up nearly 40% from the close of 2004.

- Most of the increase took place in Chaad, where employment was just short of 2,900 workers, driven by construction work for the two new oilfields.

- Employment in Cameroon also rose by moore than 100 workers from the total at the end of 2004, reaching a total of more than 1,150.
Wages paid to Chadian and Cameroonian workers in the first quarter of 2005 totaled over 3.9 billion FCFA ($6.1 million), and in the second quarter just under 3.9 billion FCFA ($6.0 million).

- Total wage payments to Chadian workerss in the first half of 2005 reached 5.7 billion FCFA ($8.8 million).

- Total wage payments to Cameroonian worrkers in the first half of the year reached 2.1 billion FCFA ($3.3 million).

Chapter 9 - Local Business Development (PDF)
Project spending on goods and services purchased from local suppliers was up significantly during the first and second quarters of the year. The increase was driven by local spending to support construction of the two new oilfields at Nya and Moundouli.

- In Chad, compared to the fourth quarteer of 2004, the project’s first quarter spending rose more than 50%. Local spending in the second quarter fell from that level but still was nearly 30% higher than the level at the end of 2004. Local business spending for the second quarter in Chad totaled 17 FCFA ($26.2 million).

- In Cameroon, quarter-on-quarter local business spending remained flat in the first quarter at 7.4 billion FCFA ($11.4 million) but rose over 13% in the second quarter to 8.4 billion FCFA ($13.0 million).

- The project has purchased over 675 billlion FCFA (over $1 billion) in goods and services from Chadian and Cameroonian businesses since construction began in late 2000.

Chapter 10 - Health (PDF)

Day-to-day service levels at the project’s worker clinics continued to average more than 10,000 clinic visits per quarter, a rate of approximately three visits per employee per quarter.

- The global ExxonMobil Stop Aids peer-tto-peer HIV/AIDS prevention program was formally launched in Chad and Cameroon at mid-year.

- Only two malaria cases were recorded aamong the non-immune project worker population during the first and second quarter. The malaria infection rate for project workers has dropped sharply during the three full years of an intensive malaria prevention initiative.

Chapter 11 - Community Involvement (PDF)
Africa Health Initiative projects, funded by the ExxonMobil Foundation, have gone to the field in both Chad and Cameroon.

- Construction is well underway on a $2550,000 expansion of the Komé village clinic, the first of several planned clinic improvement projects in southern Chad.

- Health experts in Chad have started pllanning for a combined measles vaccination and anti-malaria bed net campaign. The $650,000 donation will fund the gift of a bed net to every parent who brings a child in for a measles vaccination.

- Medical experts and community organizeers have started site visits in preparation for a campaign to fight the annual cholera epidemic in Douala, Cameroon. The $300,000 donation will underwrite improved water supplies and sanitation, primary disease factors for cholera.

- The NGO operating a social marketing pprogram for anti-malaria bed nets throughout Cameroon estimates that the $300,000 donation will make it possible to distribute 25,000 nets each year using the social marketing technique of a self-replenishing inventory fund.

Chapter 12 - Update: Chad's Revenue Management Plan (PDF)
Oil revenues managed by the citizens committee in charge of Chad’s Revenue Management Plan will help to triple the country’s spending by year end in four priority poverty relief and development sectors - health, education, agriculture and infrastructure.

- Nearly 150 oil revenue-funded projectss have been budgeted to date and about 40% of them have been completed.

- About two-thirds of the funding has goone to infrastructure projects such as roads and bridges that help Chadian citizens gain access to markets, schools, and medical care.

Chapter 13 - Update: Marketing Chad's Oil (PDF)
Unusually high worldwide oil prices continue to yield higher than expected total revenues for Chad, despite a lower daily volume of oil than originally expected, and despite quality issues that reduce demand and thus the market price for Doba Blend. Chad’s "heavy" crude oil has been garnering prices comparable to other heavy crudes around the world.

Download Full Report (PDF)

Chad Cameroon Oil Pipeline

December 4, 2005