Exxon settles dispute with Chad, avoiding $74-billion fine

By Daniel N'doh Nadjitan on 6/12/2017

N'DJAMENA, Chad (Bloomberg) -- Exxon Mobil Corp. reached a settlement with Chad over tax payments, avoiding a $74-billion fine the Central African country had imposed on the oil major.

The deal also means that Exxon will be able to keep its exploration permit in the country through 2050, Chad Petroleum Minister Bechir Madet said after a meeting with Christian Lenoble, the head of Exxon in the country.

“The accord marks an amicable agreement and ends in a definitive and irrevocable manner the dispute about the contentious issues,” the minister told reporters in the capital, N’Djamena.

The world’s biggest oil producer by market value began talks with the government of the central African nation in November after the country’s High Court heeded a claim from the Finance Ministry that a consortium led by Irving, Texas-based Exxon hadn’t met tax obligations. The court also demanded the oil explorer pay $819 million in overdue royalties.

The penalty exceeded the $61.6-billion financial blow BP Plc incurred after the Deepwater Horizon disaster, and was more than 70 times larger than the $977.5 million Exxon was ordered to pay after the 1989 Valdez oil spill in Alaska.

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