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The Chad-Cameroon Petroleum Development and Pipeline Project
Transcript of The Chad-Cameroon Petroleum Development and Pipeline Project
OVERVIEW OF THE PROJECT
Oil discovered in the 70’s
Public and private partnership
Revenue Management Plan (RMP)
Overview of the project
The Main actors involved
Financing structure of the project
Fairness of the deal
Pros and Cons
Conclusion and Aftermaths
THE MAIN ACTORS INVOLVED
Human rights abuse
Decade long recession
Corruption and Human right abuse
The World Bank
The lender of last resort
International Finance Corporation
WB’s implication in the project
THE PROJECT'S FINANCIAL REQUIREMENTS
THE PRIVATE SIDE needs the World Bank’s involvement.
The World Bank funds projects, not companies.
SOLUTION: Exxon Mobil designs a project for the DEAL
Limited recourse debt (off-balance sheet financing).
Access to more fund sources
Higher leverage ratio
REDUCED Sovereign risk
Lower project risk (political, financial, social and credit) AND reduced borrowing costs.
FAIRNESS OF THE DEAL
Financial revenues distribution : Private vs Public
The WB and its mission
The project enhanced transparency and preparation process
Reduces poverty in both countries
Reduces misuse of revenues
Prevents the involvement of neighboring countries
Failure of past projects
Governments’ lack of commitment
Negative impacts on the environment and on local people
The limitations of the RMP
CONCLUSION AND AFTERMATHS
THE RMP FAILED
THE WB WITHDREW THEIR FUNDS
The Chad government repeatedly violateD the project agreement
Backlash from the NGOs
Exxon Mobil continueS to operate the oil facility based on market conditions for the foreseeable future.