Chad’s ‘nationalization’ of all Exxon-owned assets disputed by UK’s Savannah Energy

Chad has announced the nationalization of assets of a former subsidiary of US oil and gas giant ExxonMobil in Chad, which comes after the company divested from them in December 2022
A decree signed by Chad’s president, Mahamat Idriss Deby Itno, on Thursday (23 March) declared that all the assets, prospection rights, operating permits and oil-transport authorizations held by Esso Exploration and Production Chad Inc. “are nationalized”. The firm’s sale for $407m to London-listed Savannah Energy plc had been announced by the UK firm on 9 December but it was immediately contested by the Chad government that said the sale had gone ahead despite the government’s “express objections” and in violation of its right of first refusal. The company holds concessions in a number of productive fields, as well as rights over oil extracted there and a share in a pipeline transporting crude to neighboring Cameroon for export via the port of Kribi.
The government warned then that it may ask courts to block Savannah’s purchase of Exxon’s assets in the country and take further steps to protect its interests. Exxon’s assets included a 40% stake in Chad’s Doba oil project, which comprises seven producing oilfields with a combined output of 28,000 barrels per day (bpd). It also included Exxon’s interest in the more than 1,000km Chad-Cameroon pipeline from the landlocked nation to the Atlantic Gulf of Guinea coast through which its crude is exported. But on Friday (24 March), Savannah said it plans to pursue all its legal rights to contest Chad’s move a day earlier to nationalize its upstream assets in the African country. “The actions of the Republic of Chad are in direct breach of the Conventions to which SCI and the Republic of Chad are, amongst other parties,” its statement read. Chad, which has the 10th largest reserves in Africa, exports 90% of its oil.