UPDATE 1-ExxonMobil seeks settlement in $800 mln Chad tax dispute -sources

Tue Mar 11, 2014 12:48pm EDT

* Government filed legal complaint on March 3

* Exxon meets with Chad government on Monday

* Govt says former royalty agreement not valid

By Madjiasra Nako

N'DJAMENA, March 11 (Reuters) - An ExxonMobil led consortium in Chad is seeking an out-of-court settlement after the government filed a legal claim for more than $800 million in unpaid taxes, finance ministry sources said on Tuesday.

The Central African government on March 3 filed a legal claim for 396 billion CFA francs ($837.90 million) in royalties from the consortium which also includes Chevron and Petronas.

A representative for the Exxon consortium in the country declined to give an immediate comment. ExxonMobil's press service in Houston could not immediately be reached for comment.

"We have received a delegation from the consortium on Monday at the ministry. They asked for a friendly settlement to avoid legal proceedings due to start March 17," a source in the finance department told Reuters on Tuesday.

"We have in principle given our agreement to discuss this in a friendly manner," the source added.

The oil major's affiliate Esso Exploration and Production Chad owns 40 percent of the consortium while Petronas has 35 percent and Chevron 25 percent, according to a company document.

The group operates from the southern Doba basin and has exported more than 240 million barrels of oil to global markets, it said.

Chad's government claims that an agreement signed by the group to pay 0.2 percent in royalties is not valid since it was never ratified by parliament nor approved by President Idriss Deby, a second finance ministry source said.

He added the government is now seeking a 2 percent royalty fee, accounting for the hefty legal claim.

Landlocked, former French colony Chad produces around 120,000 barrels per day and exports its oil via a 1,000 kilometre pipeline to the Atlantic coast via Cameroon.

Several Chinese firms also operate in the country's oil sector. Relations with the government have sometimes been rocky and Chad suspended CNPC's activities temporarily last year, citing environmental violations while drilling for oil.

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