Country Report Chad March 2011

The domestic economy: Chad is expected to start selling oil directly

Chad is expected to start directly selling a proportion of its crude oil, after reportedly striking a deal with Exxon-Mobil. Although this was due to get underway at the start of 2011 it is not yet clear that any direct sale has taken place. The deal should see the state-owned oil company, Société des Hydrocarbures du Tchad (SHT), selling around 44,000 barrels per day (b/d) of the estimated 120,000 b/d currently produced on average. Exxon-Mobil will continue to sell the remainder.

It is believed that the money will be managed by the long-standing director of the SHT, Khazali Acyl Ahmat, who is related by marriage to the country's president, Idriss Deby. The World Bank accused the Chadian state of diverting oil revenue intended for social spending to expenditure on defence, leading to the break-down of co-operation between the two parties in 2008 (December 2008, Foreign trade and payments). However, the great improvement in the security situation since then means that military spending may no longer be such a priority. Consequently, the SHT's new revenue stream is likely to be used in large part for the government's priority areas of infrastructure, health and education.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
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