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  • In the late 1960's the republic of Chad began exploring its own oil resources while working with oil companies from various countries.
  • In 1975, many exploration wells had been drilled and provided there was an abundance of oil.
  • In 1979, the exploration of oil was completely halted due to Chad's Civil War. This Civil War lasted from 1965-1979.
  • It wasn't until 1988 that Exxon consortium signed an agreement with Chad that would eventually lay the framework for the pipeline.

Pygmies People

• Indigenous to the rainforest

• Average height is under 5 feet

• Fully aware of the cycles of the forest

• Marginalized because they didn’t conform to society

ExxonMobil and the Chad/Cameroon Pipeline

Presented by Group 4

Edward Duarte

Irvin Castro Mejia

Jasmin Diaz

Tyler Horcher

Wassem Kadri

Jorge Salazar

Jorge Salazar

History of Oil Drilling cont (3)

Conclusion

Jorge Salazar

History of Oil drilling (cont 2)

Jorge Salazar

History of oil drilling (cont 1)

History of Oil Drilling

-Even with all the negative outcomes of the projects, the pipeline was still made.

-In 1996, ExxonMobil partnered with Chevron, and Petronas as well as funding from the World bank.

-The CEO of ExxonMobil decided to do it because he figured that another country or company would end up taking the spot anyway.

-The pipeline was finished in 2003. Although there have not been any major oil spills, the effects of the drilling have changed the lives of those living around it.

-The radar was not working and they did not test it before going to sea, and it was broken for about a year and they did not fix it because it was too expensive so because of that the radar was turned off during the trip

-The captain was supposedly drinking the night before and the senior officer was sleeping in the bunk before.

-A lot of people scrutinized Exxon for their efforts for the cleanups

-They made a dispersant for the oil but because there were no waves, it was not spreading throughout the spill

-They tried burning the oil but because of weather conditions it was bad for environment

-They tried applying a dispersant chemical called Coretix and it was successful but the chemical caused organ failure in those that helped and handled the chemical for the spill.

-They tried to use filters and skimmers, but it was not available for over 24 hours and because of the oil and kelp it would clog the intakes and systems.

-It was found that only about 10% of the oil was actually picked up.

-The spill was so profound that the largest local Marine company had to file for chapter 11 bankruptcy.

-Along with all the previous above, Exxon had its own share of problems.

-Of the two, Exxon was looked down upon for its recent oil spill in 1989

-It was the biggest U.S oil spill up until 2010.

-What made the story worse was that along with the oil spill releasing over 50 million gallons of oil was how the company handled the whole situation.

-The spill covered 460 miles and took 4 years but realistically was longer because a lot of people were still cleaning into the 21st century.

- Exxon claimed it did its duty to clean their mess but as of March 2014, researchers noted that there are still as much as 25000 gallons spread across 450 miles.

-The spill killed about 22 killer whales, 250 bald eagles,2800 sea otters, 250 thousand seabirds, 300 thousand seals and billions of salmon and herring eggs.

-Exxon was severely publicly destroyed

-CAUSES of the oil included:

-They didn't provide a rested and sufficient crew for the journey, they were half the size and working 12-14 hour shifts and they were rushing to go back to land

- A similar issue happened when a company Called Canadian Talisman Energy Inc went into Sudan.

-The area was already known for multiple problems such as bombings of churches, schools, and hospitals.

- Militias regularly enslaved many children and women

- And although the land was already barely bearable for those living in these conditions, the company still decided to drill through there. The cause of this was the government displacing 4.5 million of its people to accommodate for the oil drilling.

Everyone needs oil, but everyone knows the dangers of it effecting the environment before and after it is used

- From 1937 to the mid 1990s Shell had the largest oil operation in the world located in Nigeria

-They were pulling over 900000 barrels of oil a day from an area inhabited by the Ogoni people.

-Although it was one of the largest operation, between 1982 and 1992, shell spilled over 1.6 million gallons of oil.

-The “ogoni land” was completely destroyed. It got into the river where people drank and watered the crops, and according to the wall street journal, the ogoniland looked like a ravaged environment.

-Although shell said they invested over 100 million in environmental projects in Nigeria, there was nothing to show for it.

-After the spill, shell pulled out of the operation, but after huge protests from the Ogoni people and the MOSOP (Movement for the survival of the Ogoni People), the government then arrested protestors including Ken Sari-Wiwa who was the leader of the group

-After multiple arrests, the government then assassinated multiple protestors.

-Shell was heavily criticized for not even attempting to intervene considering it was their fault.

-Although Shell earned over 300 billion earned from 1975, nigerias per capita income dropped 23% in that time period.

Group 4

Sources

The World Bank and IRBD loans

Badgley, Christiane. "Cameroon: Pipeline to Prosperity?" PBS. PBS, 7

June 2010. Web. 20 Oct. 2015.

"Chad-Cameroon Pipeline Project." FAQs -. The World Bank Group, Mar.

2007. Web. 20 Oct. 2015.

Chad-Cameroon Oil Pipeline (n.d.): n. pag. Center For Energy Economics.

The University of Texas at Austin. Web. 20 Oct. 2015.

Donaldson, Thomas, and Patricia H. Werhane. "Chapter 14." Ethical Issues

in Business: A Philospohical Approach. Englewood Cliffs (New Jersey):

"IBRD." IBRD. The World Bank, 24 Feb. 2015. Web. 20 Oct. 2015.

Martin, J. Pual. "Chad-Cameroon Pipeline Case Study." Chad-Cameroon

Prentice Hall, 1988. 513-30. Print.

Pipeline Case Study. N.p., n.d. Web. 26 Oct. 2015.

Environmental/Social Issues

Concerns

Wassem Kadri

Tyler Horcher

World Bank/ IBRD

Tyler Horcher

Pipeline Project

The History of the World Bank

Pygmies People

Wassem Kadri

Rainforests

ExxonMobil

Wassem Kadri

The World Bank, a multi-national lending organization set up after World War II to help poor nations finance such projects such as ports and roads, claims goals of promoting sustainable economic development and alleviating poverty.

The 1990’s the World bank began focusing on stimulating economic development throughout the world particularly in poorer countries. In 1999 the bank lent approximately $15 billion to developing countries. Prior to becoming involved with the Exxon and Chad pipeline the World bank had helped fund 10 other pipeline projects around the world.The world bank did not become officially affiliated with the Chad pipeline project until 1997 even though it originally took interest in 1993

The International Bank for Reconstruction and Development was created in 1944 to help Europe rebuild after World War II. Today, IBRD provides loans and other assistance primarily to middle income countries.

IBRD is the original World Bank institution. It works closely with the rest of the World Bank Group to help developing countries reduce poverty, promote economic growth, and build prosperity.

IBRD is owned by the governments of its 188 member countries, which are represented by a 25-member board of 5 appointed and 20 elected Executive Directors.

The institution provides a combination of financial resources, knowledge and technical services, and strategic advice to developing countries, including middle income and credit-worthy lower income countries. Specifically, IBRD:

• Supports long-term human and social development that private creditors do not finance

• Preserves borrowers' financial strength by providing support in times of crisis, when poor people are most adversely affected

• Promotes key policy and institutional reforms (such as safety net or anti-corruption reforms)

• Creates a favorable investment climate to catalyze the provision of private capital

• Facilitates access to financial markets often at more favorable terms than members can achieve on their own

• Logging for the past 50 years was destroying the eco-life.

• Oil drilling caused many trees to be cut down to reach the land.

• Roads would need to be paved to causing more damage to the forest.

• Potential oil leaks and spills causing irreversible damage.

• 65 Villages affected

• Crosses 17 rivers

• 5 habitat zones

• Runs close to an endangered marine life reserve

• Visited many villages

• Interviewed 20,000 people

• Consulted w/ NGO’s

• Conducted surveys and consultations w/ the population and the Pygmies

• Almost half of Cameroons land mass

• 26 Rivers

• Evergreens & Mangrove Trees

• Animals include- Mandrills, red & green monkeys, small number of elephants, various birds, & antelope.

• Indigenous Pygmies people

• Indigenous to the rainforest

• Average height is under 5 feet

• Fully aware of the cycles of the forest

• Marginalized because they didn’t conform to society

Results of the World Bank

Tyler Horcher

Financing for IRBD

The World Bank has helped millions of poor people in middle income countries gain access to jobs, markets, and social services; helped provide them with essential services such as water, electricity, and roads; and worked with governments to improve governance and public sector management.

How IBRD Is Financed?

  • IBRD raises most of its funds in the world's financial markets.
  • In fact, in these markets, IBRD is known simply as the World Bank.
  • This practice has allowed IBRD to provide more than $500 billion in loans to alleviate poverty around the world since 1946, with its shareholder governments paying in about $14 billion in capital.
  • IBRD has maintained a triple-A rating since 1959.
  • Its high credit rating allows it to borrow at low cost and offer middle-income developing countries access to capital on favorable terms -- in larger volumes, with longer maturities, and in a more sustainable manner than world financial markets typically provide.
  • IBRD earns income every year from the return on its equity and from the small margin it makes on lending. This pays for IBRD's operating expenses, goes into reserves to strengthen the balance sheet, and provides an annual transfer of funds to IDA, the fund for the poorest countries.

The Pipeline

Tyler Horcher

History on ExxonMobil

Edward Duarte

Tyler Horcher

The Pipeline itself

Tyler Horcher

Brief History before the pipeline

  • In 1911 , an oil company name Standard Oil was broken up into smaller companies

The three part plan included these steps

• Drilling some three hundred wells in fields in southwestern Chad that hold about 900 million barrels of oil;

• Building a 1070km (650-mile) buried pipeline from the fields across Cameroon to the coast;

• Installing an off-shore terminal facility - a "floating storage and off-loading" vessel with associated marine pipelines.

Construction of the pipeline took three years and was completed a year ahead of schedule. Petroleum production is expected to last about 25 years.

Drilling is financed and carried out by Exxon, the operator, on behalf of a 3-member oil consortium including Petronas of Malaysia, and Chevron of the U.S.

By the end of 2004, 226 wells had been drilled. By September 30, 2005, about 118 million barrels of oil were produced.

The pipeline itself is owned and operated by two joint-venture companies supported by World Bank financing: one in Cameroon (Cameroon Oil Transportation Company-COTCO) and the other for the portion in Chad (Tchad Oil Transportation Company-TOTCO). The oil consortium jointly holds about 80 percent of the shares of the pipeline companies.

The government of Chad holds minority interests in both pipeline companies while the government of Cameroon holds a minority interest

in the Cameroon pipeline company.

The governments of both countries receive revenues from these holdings (financed through about US$90 million in loans from the World Bank) and through royalties (to Chad), transit fees (to Cameroon), and taxes (to both governments).

Total project costs are estimated at $4.1 billion. The private sponsors financed about $3.5 billion or nearly 85 percent of the costs. The European Investment Bank financed about 1percent of the project costs.

Exploration Area/ Alternative Energy

Irvin Castro Mejia

Safeguarding our Environment

Jasmin Diaz

Cameroon

Irvin Castro Mejia

S.O.N.Y.

Exploration Areas

S.O.N.J.

(Exxon)

(Mobil)

Mobil

Edward Duarte

Exxon

Edward Duarte

- Achieved Independence in 1960

- Highest literacy rate in African continent

- Very slow development

- Severe Economic Problems

- 475,000 sq kilometers (size of California)

- 402 kilometers of coastline

• Committed to operating in a way that protects our environment

i) Comply with all environment laws and regulations

ii) Encourage concern and respect for environment

iii) Manage business to prevent incidents and respond quickly and effectively in case of an incident

iv) Improve methods of energy to enhance environmental protection

v) Communicate with the public on environmental matters

  • Had a softer image
  • sponsored many community projects like:
  • PBS
  • Elderly community
  • Masterpiece Theatre
  • Art of Cameroon*
  • Planted over half a million trees
  • struggled with its public image
  • Oil spill in Alaska's Prince William Sound
  • Over 53,094,510 gallons of oil spilled covering 460 miles
  • killed many different animals
  • took about 4 years to clean up

Exxon's Promise

Edward Duarte

Mobil's True Nature

Edward Duarte

  • Wanted to establish an environmentally friendly image
  • Began using gps, tug boats, and other navigational equipment
  • "Promised" to respond to spills quicker and also do everything to prevent them
  • Exited the solar power business
  • involved with corrupt regimes
  • 1900's tried to enter the oil-rich country called Kazakhstan ruled by Nursultan Nazarbayev
  • Mobil also involved with James Griffin
  • Griffin was indicted in 2003
  • Also involved with Guinea's oppressive ruler, Mbasogo

-60 Exploration Projects

North America------------------- Gulf of Mexico

Eastern Canada------------------ Nova Scotia, Newfoundland

Western Canada----------------- Cold Lake Field

South America--------------------Argentina, Venezuela, Brazil, Trinidad, Guyana

Europe----------------------------- North Sea, Netherlands, Germany, Norway, UK

Africa------------------------------- Nigeria, Equatorial Guineas

West Africa------------------------ Angola, Chad, Cameroon

North Africa----------------------- Egypt

Asia-Pacific------------------------Malaysia, Australia, Indonesia

Caspian ---------------------------- Azerbaijan, Kazakhstan

Middle East------------------------ Abu Dhabi, Yemen, Qatar, Kuwait

Russia------------------------------- Sakhalin Island

ExxonMobil

  • Merged in 1998
  • Signed a US$73.7 billion definitive agreement to merge and form
  • Had to divest 2,500 service stations in U.S. and Europe
  • The company grew exponetially

Edward Duarte

Jasmin Diaz

Chad

Jasmin Diaz

Chad & Cameroon

Alternative Energy

Irvin Castro Mejia

- Gained independence in 1960

- Northern and southern regions immensely different

- North was arid, dessert like, & primarily Muslim

- South was tropical & animistic

- 166 miles of paved roads

- No Railroad system

- Substandard telecommunication system

- two of the poorest countries

- rampant disease

- poor nutrition

- extreme poverty

- little safe drinking water

• Environmental groups were pressuring ExxonMobil to meet the world’s energy needs though a more environmentally friendly energy source.

• Alternative fuels are impractical

• Solar, Water & Wind power- requires more space than the actual space they are powering.

• Ethanol alcohol (biomass energy) - not as harmless as claimed. Requires lots of agricultural efforts and byproducts.

• Hydrogen Energy

• Despite the pressure they are committed to using fossil fuel.

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