Exxon Mobil in talks with Chad following court order for $74bn fine in October

 
Francesca Washtell
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Exxon Mobil is in negotiations with Chad after a court in the central African nation fined the US firm $74bn (£59bn) over unpaid royalties.

The world's largest publicly traded oil and gas company has appealed the court ruling, which was released on 5 October, but the appeals hearing has been delayed because of the talks, Bloomberg reported.

The court imposed the fine after the finance ministry said a consortium led by Exxon Mobil, owed more than $800m in unpaid royalties.

The fine exceeds the $62bn hit British oil major BP took for the Deepwater Horizon disaster in 2010 and is around seven times Chad's annual gross domestic product.

"The dispute relates to disagreement over commitments made by the government to the consortium, not the government's ability to impose taxes," Exxon Mobil said in a statement.

On July 12, 2016, the upstream producing consortium, comprised of affiliates of ExxonMobil, Petronas and Societe des Hydrocarbures du Tchad (SHT), filed for arbitration at the International Court of Arbitration in Paris.

The arbitration is related to an exemption from export duties on crude production included in the consortium’s agreement with the government of Chad.

The decision to file for arbitration was taken after extensive discussions with the government of Chad. The consortium is continuing discussions with the government and hopes to reach an amicable resolution.

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The fine exceeds the $62bn hit British oil major BP took for the Deepwater Horizon disaster in 2010 and is around seven times Chad's annual gross domestic product.

The Chadian fine is the latest in a slew of bad developments for the oil group. In September, the attorney general of New York launched an investigation into Exxon Mobil's accounting practices, probing why the group has not written down the value of its assets despite the prolonged oil slump which has weighed on the industry.

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Exxon Mobil is the only oil major which hasn't booked a paper loss amid the commodity rout, though this summer it said its profit for producing oil and gas had fallen by about 85 per cent to $294m.

Exxon Mobil has been contacted for comment.

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