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Mediterranean Quarterly 14.2 (2003) 46-59
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Innovations of the Chad/Cameroon Pipeline Project:
Thinking outside the Box
Donald R. Norland
It's a telling commentary on our time that nations can be propelled from obscurity to prominence by the simple announcement that oil deposits have been discovered on their territory. Such has been the case in Chad where, with the formal approval of the Chad/Cameroon Petroleum Development and Pipeline Project in June 2000, that country took a major step toward joining the select company of the world's petrostates.
Although Chad is the fifth-largest country in Africa, twice the size of Texas, with eleven hundred miles between its border with Libya in the north and those of Cameroon and the Central African Republic in the south, it was best known—in its prepetroleum days—for its armed rebellions, coup d'états, political instability, and extreme poverty.
Despite its size, there was little reason to call attention to itself. Spanning three climatic zones, its geography and climate insulated it from the outside world and isolated its diverse peoples. In the barren and mountainous north, mainly Arabic-speaking, Islamic-oriented nomads still migrate with their camel and cattle herds—in sharp contrast to the people of the agriculturally rich south, populated by French-speaking Christian or animist farmers.
Chad draws occasional media attention in the World Bank's annual reports listing the poorest countries of the world, where Chad regularly ranks fifth. Its extreme poverty is evident from the fact that 80 percent of its people subsist on less than one dollar per day. With life expectancy of forty-eight [End Page 46] years, the people of Chad find themselves in the lower ranks of African countries. The illiteracy rate of 59 percent for males and 68 percent for females is one of the continent's highest.
For the people of this landlocked, impoverished land, the announcement, after nearly a decade of inconclusive discussions that Chad was the target of the "largest foreign investment in Africa" came like a thunderbolt. It aroused people's expectations and altered their self-image. They spoke with renewed hope that, thanks to their own resources, they might escape the fate of a poor, aid-dependent African economic basket case and, instead, legitimately aspire to become a self-reliant, self-respecting, independent nation.
The project that inspired this enthusiasm is a unique public-private partnership consisting of a consortium of oil companies, the government of Chad, and the World Bank. The goal, over the twenty-five-year life of the project, is to drill and transport an estimated 1 billion barrels of oil from southern Chad through a 650-mile-long (1,070 kilometer) pipeline across Cameroon to off-loading facilities at the Cameroon port of Kribi on the Atlantic Ocean. 1
The required capital—$3.7 billion—comes from the consortium of oil companies complemented by World Bank loans. Although the bank's financial participation is only 3 percent, its participation was critically important to the consortium in providing a measure of "risk mitigation." The bank also aided Chadian authorities by offering options for managing oil revenues designed to heighten Chadian government awareness of the importance of transparency. The bank's role could be described as that of "moral guarantor" against the danger that the project would be lumped in with other oil-development projects which, as a result of financial and environmental scandals, were damaging companies' profits as well as their reputations.
Understandably, a project the size and scope of the Chad/Cameroon Project touched off a flurry of excitement, especially among companies specializing in oil drilling and operations. It also attracted immediate attention— [End Page 47] mostly in the form of vocal criticism—from nongovernmental organizations (NGOs) with environmental and human rights concerns.
The concerns of the NGOs stemmed in part from Chad's history of civil unrest and human-rights abuses and the absence of law and order. The NGOs energized their networks with public warnings about the project's threat to the environment, focusing initially...