The Strategist

Chad court fined Exxon Mobil record $ 74 billion

10/07/2016 - 11:29

Chad court fined Exxon Mobil $ 74 billion. This amount is equal to a five-year GDP of the African country.

Mike Mozart of TheToyChannel and JeepersMedia on YouTube
Mike Mozart of TheToyChannel and JeepersMedia on YouTube
According to Bloomberg, court in the Chadian capital N'Djamena granted claim of the Ministry of Finance, which accused Exxon Mobil’s consortium of tax evasion. The court decided that the American company has to pay compensation in the amount of $ 74 billion, with an additional pass $ 819 million in royalties.

The fine is the largest that has ever been imposed on an oil company. Until now, the maximum payment was $ 61 billion, imposed on BP after an accident in the Gulf of Mexico in 2010. Then, as a result of a misadventure on an oil platform, 11 people died and local ecosystem suffered considerable damage.

However, international law expert from Los Angeles Jeffery Atik commented to Bloomberg that Chad is unlikely to receive the full amount, requested by the Court of N'Djamena. According to him, other countries will not help Chad to fulfill this decision. If Exxon Mobil decides to quit the African country, leaving all its property there, the loss will not be as great.

Exxon Mobil’s spokesman Todd Spitler said the company does not agree with the Chadian court’s decision. At that, he did not explain how the African state authorities determined the amount specified in the lawsuit.

"We do not agree with decision of the Chadian court, and are now deciding what our next steps will be," - said company’s spokesman Todd Spitler to Reuters.

Exxon Mobil produces oil in Chad, and also owns a pipeline to export oil to Cameroon. Chevron had been Exxon’s local partner since 2003, but left the project in 2014.

In 2006, Chadian President Idriss Deby accused Chevron and Malaysia's Petronas in tax evasion. He gave them 24 hours to curtail their activities and leave the country. However, the case was closed later. 

The largest fine ever paid by an oil company - $ 61 billion in total. In 2013, the US Supreme Court imposed it on BP's oil and gas company in connection with an incident in the Gulf of Mexico.

Then, BP agreed that the company was responsible for manslaughter and other crimes in connection with an explosion on Deepwater Horizon oil rig in April 2010, when 11 people were killed.

In the second quarter of 2016, Exxon earned $ 1.7 billion, which is 59% less than the same period last year. This figure was the lowest since 1999.

Chad began exporting oil in 2003. In recent years, it was hit hard by falling oil prices just like other countries dependent on exports of energy.