Mining giant Glencore will provide a loan of US$1.3bn to Chad to purchase oil assets belonging to oil major Chevron
The state-owned company Société des Hydrocarbures du Tchad (SHT) will purchase Chevron's assets in Chad, including ExxonMobil's oilfields too, using the loan provided by Glencore, according to reports.
The deal also includes a 21 per cent stake in the 1,070km pipeline that links the oilfields of Chad with an export terminal in the Atlantic through Cameroon.
The loan amount is almost 10 per cent of Chad's annual GDP, estimated to be above US$11bn as of 2012. Glencore is arranging the loan with help from financial institutions like Deutsche Bank, Natixis, Crédit Agricole and regional development lenders, according to sources.
This deal is part of the efforts undertaken by commodities and trading houses to secure oil supplies from African nations, by investing in local production of crude and other materials. Glencore already has a presence in the landlocked country in Central Africa, after it bought oil company Caracal Energy for US$1.35bn in April 2014. The trading house first invested in Chad in 2012 when it paid about US$300mn for a stake in several oilfields, added reports.
The purchase is expected to transform SHT, by significantly increasing production. The company is buying a 25 per cent stake in seven fields in the Doba basin as well, which are operated by ExxonMobil.
