Chad: The government acts to nationalise the ex-Esso

La nationalisation des actifs d’Esso Tchad, contestée par Savannah Energy PLC, a été votée par le Parlement de transition tchadien.

Chad's transitional parliament voted on Wednesday to nationalise all the assets of Esso Chad, a former subsidiary of US oil giant ExxonMobil, whose recent sale to a British company is being contested by N'Djamena.

"The law on the nationalisation of Esso's assets and rights has been adopted by 98.3%," said government spokesman Aziz Mahamat Saleh. It was voted by the National Transitional Council (CNT), which was installed in early October after a National Reconciliation Dialogue (DNIS) granted Mahamat Idriss Déby Itno another 24 months as transitional president.

The CNT, whose "deputies" were appointed by Mr Déby, has acted as a parliament since he was first proclaimed head of state on 20 April 2021, at the head of a junta of 15 generals. The text was adopted by 172 votes in favour, one abstention, and one vote against, less than a week after the publication of a decree announcing this nationalisation. "The decree, signed by Mr Déby and released on Friday, states: "All assets and rights of any kind arising from the conventions, research permits, exploitation authorisations and transport authorisations for hydrocarbons of the company Esso Exploration and Production Chad Inc. are nationalised.

On 9 December 2022, Savannah Energy PLC, which operates mainly in Africa, announced in a press release that ExxonMobil had sold it all the assets of its subsidiary Esso Exploration and Production Chad Inc. Chad immediately contested the sale, saying it was "carried out despite the express objections of the Chadian government" and in disregard of its "right of pre-emption".

Savannah Energy protested on Friday in a statement against what it considers to be "a direct violation of international conventions" and announced its intention to sue the Chadian state. The company is also relying on a recent arbitration by the International Chamber of Commerce in Paris (ICC), which arbitrated in its favour on 7 January.

Chad, a vast semi-desert country in Central Africa, became one of Africa's oil-producing and exporting countries in 2003 and has since become heavily dependent on oil. In 2020, profits from hydrocarbons represented 11.33% of its GDP, according to the World Bank.