The Republic of Chad has recently negotiated project agreements between itself, Cameroon, and a consortium of ExxonMobil, Chevron Corp. and Petronas in relation to the development of a 1050 km underground pipeline from a 20-year old oilfield in Southern Chad through Cameroon to the Atlantic coast. Oil reserves of approximately one billion barrels have remained trapped in landlocked Chad pending discovery of an appropriate mode of evacuation which was resolved following signing of a treaty between Chad and Cameroon based upon the provisions of the United Nations Convention on the Law of the Sea.
Chad is also continuing negotiation of the related project-financing arrangements for this US$4.5 billion undertaking which is the largest oil pipeline project currently in development worldwide, including negotiations with the World Bank (IBRD) and the European Investment Bank. Depending on world oil prices, estimates of Chad’s revenues from royalties, dividends and taxes vary between US$2.5 billion and US$6.5 billion over the 25-30 year life of the project. The project is scheduled for financial close by the end of 2000 with construction to take 31/2 years thereafter.
Stikeman Elliott has been representing Chad in all facets of the project since 1996, with Montreal partner Martin Scheim working with partners Alain Massicotte and Erik Richer La Fleche. Law firms representing other participants in the project include: Linklaters (London and Paris) representing the sponsors; Allen & Overy (Paris) representing the World Bank; Clifford Chance LLP representing International Finance Corporation (IFC); White & Case LLP (New York and Paris) representing the Export-Import Bank of the United States; the French export credit agency (Coface) and ABN AMRO Bank and Crédit Agricole Indosuez acting as arranging banks.