After 44 years of planning, Chad begins work on transformative energy schemes

The Saharan state of Chad has officially begun work on two energy projects that it hopes will transform its economy. A ceremony was held on Saturday (28 October) in which President Idriss Déby laid the foundation stone for the twin plants.

President Idriss Déby lays the foundation stone for Sedigui and Rig-Rig (Government of Chad)

The two schemes are Sedigui oil refinery and the Rig-Rig gas treatment plant, both of which are to be built in the northwestern Kanem region, north of Lake Chad and about 300km from the capital, N’Djamena.

The goal of becoming partly self-sufficient in petrol and gas has been a national goal of Chadian governments for decades, and has become tied to the country’s self-image and national prestige. In his speech, Déby said the Sedigui project had been planned since 1973, but the country’s political situation has always been too unstable for it to go ahead.

The GDP of Chad increased from $220m in 2002 to $1bn in 2014 owing to the successful exploitation of an oilfield in Kanem and the Doba basin in the south of the country, and the construction of a $4bn pipeline to terminals on the Atlantic coast. However, it has since slumped to $660m following the collapse of oil prices in 2015.

The construction cost for Sedigui is expected to be $120m and Rig-Rig are $58m. Together they account for more than 10% of the country’s annual income. In return, the Chadian state will be able to capture more of the value of its oil reserves.

Chad will own 40% of Sedigui and 30% of Rig-Rig, with the remainder split between the Nigerian National Petroleum Corporation and the Chinese National Petroleum Company (CNPC).  

Last year, Chad won a legal case in its own courts against ExxonMobile. The government argued that the Doba consortium that the US company led should have paid 2% royalties on its oil rather than 0.2%. The Chadian high court ordered ExxonMobile to repay $819m and imposed a fine of $74bn.

Hamid Tahir Guilim, the chief executive of Chad’s Hydrocarbons Corporation, said the new facilities would refine between 2,000 to 3,000 barrels of crude oil a day, and produce 400,000 cubic metres of gas.

Construction work is scheduled to last 12 months.

Further Reading:

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