Petronas Disputes Chads claim over taxes

Petronas Disputes Chad's Claim Over Taxes
Chad News 9/1/2006

PETROLIAM Nasional Bhd (Petronas) www.petronas.com.my has disputed the Chad Government's claim that the national oil company failed to pay back taxes, adding that it is seeking an amicable solution on the matter.

In a statement yesterday, Petronas confirmed that it has received notification from the Chad Government to suspend its activities in the republic and immediately leave the country.

"Petronas currently has no personnel based in the Republic of Chad," it added.

Petronas also clarified that it has fully complied with its contractual obligations, "including all tax payments" under the agreements that were signed with the Government of Chad in 2000 for the Chad-Cameroon integrated oil development project.

"The issues raised by the Government relate to the validity of one of the agreements signed between the parties which had been previously accepted," Petronas said.

Besides Petronas, another member of its consortium, Chevron, had also received a similar notification from the Chad Government. The African nation had accused Chevron and Petronas of failing to pay US$450 million (RM1.7 billion) in dues to the Government.

"Petronas is proactively working towards finding an amicable solution on this matter. It is regrettable that the Government of Chad acted in this manner, while discussions were still ongoing," Petronas said.

As a responsible partner and investor in Chad, Petronas said it has also in the past assisted the Government in various areas of petroleum operations, including training Chadians in managing and developing their petroleum resources. Petronas also sponsored Chad students to study at its Universiti Teknologi Petronas in Malaysia.

Reuters reports: Chad will not unilaterally take over 60 per cent of the country's oil producing consortium in a tax dispute with two of its members, but wants to negotiate a state share, a presidency spokesman said yesterday.

President Idriss Deby has ordered consortium members Chevron and Petronas, which together hold 60 per cent, to leave the country, saying they are refusing to pay contracted taxes.

"That doesn't mean that Chad will take that 60 per cent," Dieudonne Djonabaye, deputy communications director at the Chadian presidency, said by telephone from N'Djamena.

"If Petronas and Chevron agree to pay (their tax dues), they will be associated with the renegotiation" of the oil consortium headed by Exxon Mobil, he added.

Djonabaye was clarifying a speech made by Deby on Tuesday stating that the Chadian state wanted to enter into the oil consortium "at a reasonable level of 60 per cent" - the exact share held by the expelled companies Chevron and Petronas.