Monday, 11 August 2014

Chad to take CNPC to Paris arbitration court

Chad to take CNPC to Paris arbitration court
Chad is reportedly making preparations to take China National Petroleum Corporation (CNPC) to an arbitration court in Paris after compensation talks stalled. Chad has levied a claim for US$1.2 billion in compensation from the Chinese state-owned company for breaking the country’s environmental rules, according to reports.

Chad's oil minister, Djerassem Le Bemadjiel, told a news conference on Saturday that the move was "to avoid further environmental degradation, not to make place for other companies".

The dispute began in July 2013 after Chad said it discovered large quantities of crude had been dumped into pits dug in the Koudalwa region, where CNPC has held licenses to several oil blocks since 2009.

The CNPC was forced to suspend operations in Chad this May after refusing to pay the US$1.2 billion fine for "unacceptable practices" which led to "noxious spills" around drilling sites.

Secretary-general of the Chadian government, Abdoulaye Sabre Fadoul, at a news conference last week, stated that "Amicable negotiations are no longer possible. All efforts have been in vain… That is why we have decided to take a complaint to the arbitration tribunal in Paris, as agreed under the terms of our contract with CNPC."

As well as taking the case to the International Arbitration Chamber of Paris, the minister said the government had lodged a complaint against CNPC at a court in N'Djamena for ‘environmental destruction and endangering lives’ and had cancelled five exploration licences held by CNPC.

A spokesman for the Chinese oil company could not immediately be reached for comment.

Chad, which began exploiting its oil deposits in 2003, has a history of difficult relations with Chinese companies operating on its soil.  In March, Chadians working for Great Wall Drilling Corporation and China National Logging Corporation went on strike to denounce their working conditions and demand salary increases.

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