Bearing one of the few country names confusable with a fraternity boy, Chad has had a relatively smooth initiation to the club of oil producers. But now the nation and its prospects for prominence are stumbling.

Chad is a landlocked nation in west Africa, bordering on some of the region and world's most turbulent polities. With 70 political parties of its own, Chad's history after independence from France has been fraught with military coups and boiling civil war.

As is prone to happen with an influx of petrodollars - money whose exchangers are often less concerned with human rights than land claims - the surge of cash into an already strife-ridden country has served to pad the coffers of warring factions and perpetuate misery rather than lead the people to health and wealth.

In 2004, Chad enjoyed the highest GDP growth in the world, at an astounding 30%. With 1 billion barrels in reserve oil capacity, it is easy to guess where that spike in the national economy's size came from.

Before 2003, there was no oil production in Chad despite its natural endowment. In July of that year, a consortium of international petroleum companies led by Exxon completed work on a pipeline that runs from three major fields in Chad's Doba basin to neighboring Cameroon's Atlantic coast.

Now, Chad produces on the order of 160-170 thousand barrels of oil per day.

But that output is in jeopardy if troubled Chad pursues the trend established across the ocean.

Trans-Atlantic Antics

I have told you before about the various steps and missteps being taken in South America, where Venezuela is spearheading the Bolivarian Alternative movement and encouraging Bolivia and others to hold resource majors to the derrick fire.

Bolivia's Evo Morales boldly declared his demand for "renegotiation" of oil and gas production contracts this May, only to see his plan fizzle with the recognition that native know-how could not preserve the national output that makes renegotiation attractive in the first place.

The Chadian leadership, at its helm President Idriss Déby, demands that Exxon, Chevron, and Malaysia's Petronas sit down and come up with a new deal to better the "crumbs" the president says his country is now receiving.

But many rights groups say even those "crumbs" are being misused, with the morsels being channeled in to internecine warfare and little to the country's poor. More over, Chad is a de facto front in the ongoing violence in Sudan.

Sudan, Chad's eastern neighbor, has far more in the way of oil and in oil's way. Recent pictures and plans set for the capital Khartoum are impressive, as a bevy of Beijing bucks have come to this former English protectorate (even for a time called Anglo-Egyptian Sudan).

But the sinister side of Khartoum has been more magnified in recent years. The country's western region of Darfur has been the site of incessant raids by government-backed Janjaweed horsemen, whose rampages have driven millions from their nomadic villages and, in many cases, straight westward into Chad.

Chad is party to a bizarre sort of population exchange along its border, since during the sixteen-year regime of Déby, rival Chadian militias have used Darfur as an operating base for launching raids into Chad, thereby exacerbating the already dire situation next door.

A Short-lived Spigot

Chad's GDP growth is wobbling already, trickling from 30% to 18% and now to 10% and below. Cameroon's oil production is falling steeply, which should show Chad that oil wealth is sometimes fleeting and cannot be an excuse for profligate warfare.

80% of Chad's 10 million people still live on subsistence farming. Only 10% of the country is arable land, with the rest either full-fledged or borderline desert. The capital N'Djamena is no Khartoum, and while Sudan pumps twice as much per day N'Djamena is not likely to catch up if its open hostility to majors continues.

Sudan's greatest asset of all may be that PetroChina has agreed to turn the other cheek and even block international action on its behalf, even risking divestiture stateside. Chad has no such staunch ally, and Sudan openly supports Chadian rebels.

This country is, unfortunately, a microcosm for so much of Africa's history in the past few hundred years. What riches are found underground are often treated as plunder rather than a chance for starting anew. International organizations treat the entire continent as an orphan while crossing their fingers for the poverty pendulum to swing to some workable balance.

Petronas will not be allowed to sell Chadian oil if it does not ink a new deal with Déby's people by Thursday evening. But with a scenario so messy and unpredictable and supplies that are surely helpful but achievable elsewhere, few would blame Petronas for leaving Chad at the party alone to sober up.

 

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