A disagreement between Chad's government and Chevron and Petronas over tax benefits included in a 2000 accord led to President Idriss Deby ordering their expulsion at the weekend, industry sources said on Monday, according to Reuters. Deby ordered the two companies to shut their offices and quit the landlocked central African oil producer as of Sunday in a speech to a government meeting on Saturday. He said the two firms were refusing to pay 250 billion CFA francs ($486.2 million) in unpaid taxes. But on Monday the two companies had still received no formal communication from the government about its intentions, said the sources, who asked not to be named. Chad's Communications Minister, Hourmadji Moussa Doumgor, confirmed the company's representatives had not left the country but gave no more details immediately. The expulsion order came as a bombshell to foreign oil executives in Chad, where a consortium led by Exxon Mobil and including Chevron and Petronas has pumped oil since 2003. The country, ranked one of the poorest and the most corrupt in the world, produces around 160,000-170,000 barrels per day. Deby complained that Chad's government, which receives royalties and taxes from the consortium agreement but does not produce oil itself, was only getting "crumbs" from the deal. He has demanded that it be renegotiated. Some analysts saw the expulsion order as a crude attempt by the Chadian leader, who has ruled since seizing power in 1990, to muscle in to the consortium partnership and carve out a more active share for a new state oil company being created. "There seems to be a concerted effort to alter the structure in place," one industry source said. But a Chadian minister, Mahamat Bechir Okormi, denied any link between the government's tax complaint and its oil sector ambitions. "We want them to pay the tax. There's no other solution ... it's not a matter of control," the minister for state ethics and control told Reuters during a visit to Kuala Lumpur. Industry sources said the dispute stemmed from differing interpretations of a tax benefits agreement signed in 2000 between Chevron, Petronas and the Chadian government. Chevron and Petronas argue that under this agreement they were entitled to annual tax deductions based on an estimated depreciation of oil assets. "This erroneous interpretation of the aforementioned (2000) agreement is absolutely rejected by the Chadian government," Deby said in his speech on Saturday. He added the oil minister, Mahamat Nasser Hassane, and two former oil ministers were being suspended from their current duties pending investigation for writing letters to the companies which allowed them to maintain their position. Chevron has said it was complying with tax obligations. "Arbitration seems like a definite possibility," the industry source said. Analysts say Deby's blunt expulsion order could be a risky act of resource nationalism by a producer that needs foreign capital and expertise to extract its oil and get it to market. Deby, who has been fighting off attacks by eastern rebels and was re-elected in early May in polls boycotted by opponents, had criticised the original 1988 oil consortium deal as a "fool's agreement" in which Chad was losing out. Petronas holds 35 percent of the consortium, Chevron 25 percent and Exxon the remaining 40 percent. Chad was earning a 12.5 percent wellhead value share of total production under the agreement, as well as taxes. In early August, Deby broke Chad's ties with Taiwan and established relations with China, and analysts believe he may be hoping to obtain fresh oil investments from Chinese companies.
