Chad fines China's CNPC unit $1.2 billion for environmental damage

Fri Mar 21, 2014 2:34pm EDT

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N'DJAMENA (Reuters) - Chad has fined the local unit of China National Petroleum Corporation (CNPC) $1.2 billion for environmental violations, a statement from the environment minister said on Friday.

The government suspended all of CNPC's activities in the country in August for violating environmental standards while drilling for oil in the south, and ordered an audit of all crude oil explorations in the country.

It allowed CNPC to resume operations in October after the company improved its environmental practices. The government urged the company then to strictly respect environmental rules, in particular those concerning the management of waste.

"Following the non-respect of its obligations and repeated violations of environmental norms ... the government is demanding that CNPCIC (CNPC International Chad) ... pay a fine of $1.2 billion," the statement signed by Mahamat Issa Halikimi said.

In the statement seen by Reuters, it also demanded that CNPC's unit takes steps to repair all damage and future damage caused through pollution of the Bongor Basin.

The government said in August when it shut down CNPC's operations that the company dug trenches and dumped crude without safeguards and then later asked local Chadian workers to remove the crude without giving them protective gear.

CNPC was not immediately available to comment.

Chad became a crude producer in 2003 and production peaked at about 176,000 barrels per day in 2005 before declining primarily due to ageing wells in the country's Doba oil field.

CNPC has been operating in Chad since 2003 and recently won rights to begin exploration on new blocks in the south of the Central African state. The firm also operates a joint venture, 588-million-euro ($780 million), 20,000 barrel per day refinery with Chad.

(Reporting by Madjiasra Nako; Writing by Bate Felix; Editing by Daniel Flynn and Mark Potter)

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