Chad's 2018 EITI Report covers extractive activities in the country for that fiscal year.
Chad is a leading producer of crude oil in Central Africa. International companies, represented by the Esso Exploration & Production Chad Inc (EEPCI), the China National Petroleum Corporation International (CNPCI) and the Glencore consortiums, are key actors in the exploration, production and refining of oil, alongside the Hydrocarbons Company of Chad (Société des Hydrocarbures du Tchad, SHT). Its nascent gold sector is primarily artisanal, alongside industrial mining of limestone. Chad however ranks 187 out of 189 countries in the United Nations Development Programme's 2019 human development index. Social conflicts and public debate have arisen around the management of oil revenues, including the oil-backed loans granted by Glencore in 2013 and 2014, environmental impact of extractive industries and poverty alleviation.
Chad was the first country to include oil transport (the Chad-Cameroon pipeline) and refining (the Djermaya refinery) in the scope of its EITI reporting. This led to better public understanding of the midstream hydrocarbons sector. Chad EITI pioneered efforts to publicly disclose information about the terms of the oil-backed loans granted by Glencore, showing that most of Chad's revenues from the oil sector were primarily directed to reimbursing the loan. Chad also participates in the EITI's targeted efforts on commodity trading, achieving progress in disclosing information about the sale of the government's shares of oil. The government is also starting to open up its own systems, with detailed quarterly notes about the oil sector on the Ministry of Finance website and access to SHT's audited financial statements. After the government committed to disclosing all oil and gas contracts in April 2018, Chad EITI published them online. In december 2020 the EITI in Chad published an EITI report under flexible reporting for the 2018 fiscal year.
As per the 2015 Tax Code, the main taxes and fees imposed on companies operating in the oil and gas sector include corporate income tax, royalties on oil and gas production and the levy on crude oil exports. The Oil Code and individual oil contracts, either concession agreements or production sharing contracts, complete the applicable fiscal regime. Taxes and fees imposed on companies operating in the mining sector include taxes specific to the sector, such as the extraction tax. The Public Treasury is the main body responsible for collecting and managing taxes paid to the central government.
Following the Government of Chad commitment to contract transparency, on 25 April 2018, the Government adopted a decree, on 8 November 2019, making it mandatory for all oil and mining contracts to be published online within 90 days of their signature. The Chadian MSG has already published an online register of all oil licences, which provides access to the various documents relating to each contract.
Oil and gas licenses can be awarded either through competitive bidding or direct negotiations. The State reserves the right to approve or reject applications in its sole and absolute discretion. Mining licenses are awarded on a ‘first come first served’ basis.
Since production started in 2003, Chad has been a leading producer and exporter of crude oil. Production reached 46.4 million barrels in 2018. Minor mining of mineral commodities such gold and limestone also takes place. Crude oil is transported to the port of Kribi in Cameroon through the Chad-Cameroon pipeline. Ongoing development of new oil and gas fields is taking place in areas adjacent to the country’s producing Doba fields in the South. The government has also encouraged new exploration for deposits of non-hydrocarbon minerals since 2015.
Chad has rich deposits of crude oil, estimated in 2019 to amount to 1,5 billion barrels. Abundant crude oil resources are found in several basins in the country’s North, West, South-West and South-East. Gold deposits are mainly located in the West, while uranium deposits are predominantly in the North and West.
Chad participates in the EITI targeted effort on commodity trading. Its 2018 EITI Report provides information on the long-term agreement between the Government of Chad and Glencore that includes a USD 2 billion oil-backed loan to the government, with cargo-by-cargo sales declared by the SHT and further information disclosed by Glencore Energy UK. Cargo-by cargo information includes the revenues received for each sale and the destination.
The 2018 EITI report shows that Chad generated USD 676 million of revenues from extractive industry. Almost all of these revenues (99.34%) came from hydrocarbons, including oil transport and refining. Revenues were mainly collected through crude oil sales, corporate income tax, and the Treasury’s share of royalties on oil and gas production. The 2018 EITI Report showed that gross revenues from the oil sector were initially USD 966 million, but that USD 326 million were withheld, including to reimburse the Glencore oil-backed loan and transportation costs.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
- The 2018 EITI report adopted flexible reporting and included a section on the impact of the Covid 19 pandemic on the extractive sector
- The Chad EITI website is the only publicly available source for contracts that govern the exploitation of natural resources in Chad.
- Glencore Energy UK participated in EITI reporting for the first time under the 2015 EITI Report and disclosed information about the repayment of the almost USD 2 billion oil-backed loans by the government of Chad. The 2016 EITI Report provided even further information about the loan.
- Chad was the first country to cover oil transit (the Chad-Cameroon Pipeline) and oil refining (petroleum refinery at Djermaya) in its EITI reporting.
- Chad EITI used to cooperate closely with the Petroleum Revenue Oversight and Control Committee (CCSRP), which ceased to function in 2018.
- Chad EITI disclosures compared the statutory royalty rate that should be paid by oil consortiums with the effective rate. They also included a breakdown of production and transportation costs that were withheld on each cargo collected on behalf of the state, showing strong variations from a cargo to another despite similar volumes transported.
The government issued Prime Ministerial Decree 83/PM/CAB/07 on 20 August 2007 declaring Chad’s intention to apply for EITI candidature. Chad joined the EITI in 2010.
The 2018-2020 Chad EITI work plan is structured around the Requirements of the EITI Standard. Setting up registers for the oil and gas and mining sectors, reporting on transfers to producing regions and promoting public debate are amongst priorities.
The decrees of 03 octobre 2018 and of 07 janvier 2019 describe the mechanisms of implementation. MSG is currently chaired by the Minister of Petroleum and Mines, Mr Oumar Torbo Djarma. The National Coordinator is Amina Mahamat.
Recognising the ongoing challenges associated with the COVID-19 pandemic, the EITI Board agreed the extension of measures to provide flexibility in EITI implementation and reporting.
Flexible EITI reporting MSGs may prepare reports based on information disclosed by government and/or companies, subject to MSG endorsement and providing that the flexible reporting requirements are met.
Chad prepared its 2018 report using the flexible reporting approach. The report adopted flexible reporting and included a section on the impact of the Covid 19 pandemic on the extractive sector.
The Board recognised Chad’s efforts to go beyond the minimum requirements of the EITI Standard in the disclosure of contracts, information about the legal framework and on disclosures of in-kind revenues, including repayments of oil backed-loans.
The Board encouraged the government to continue discussions on ensuring space for civil society, MSG governance, license allocation and register, production data, direct subnational payments, subnational transfers, SOE quasi-fiscal expenditures and public debate.
Chad's second validation will commence on 1er Octobre 2021.
Previously, the country was compliant under the 2011 Rules.
Chad's 2017 EITI Report covers extractive activities in the country for that fiscal year.
Chad's 2016 EITI Report covers extractive activities in the country for that fiscal year.
Chad EITI published its 2018-2020 work plan in February 2018, in accordance with Requirement 1.5 of the EITI Standard.
The Annual Progress Report provides an overview of all EITI Chad's activities during the past year.