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Chad threatens to shut down oil pipeline

16 April 2006 at 01:43 | 1022 views

Chad is threatening to cut off its flow of oil to the international market in a dispute with the World Bank.

Oil minister Mahmat Hassan Nasser said Saturday that in January the World Bank froze an escrow account with $125 million US in oil royalties in London, where the royalties are deposited on behalf of the government.

He said that without payment, the government would have to shut down the pipeline that flows through Cameroon to an Atlantic Ocean oil terminal.

"Chad has the right to do this," the oil minister told the Associated Press.

Nasser said the World Bank had until midday Tuesday to release the funds or the pipeline would be shut down. He said it would not hurt his government because the royalties have already been cut, but would hurt other businesses and Cameroon, which have been collecting their revenues.

Earlier, Prime Minister Pascal Yaodimnadji told diplomats that his nation had "lived in the past without oil and will live tomorrow without oil."

Chad’s oil exports - 160,000 barrels per day - are small by international standards, but demonstrate the government’s desperation for cash.

Chad reached a deal in 2003 with the World Bank for the financing of a pipeline on condition that most of the revenues be used to alleviate poverty.

Earlier this year, President Idriss Deby Deby broke that deal to use the money to finance his military and the World Bank suspended $124 million US in aid in addition to freezing the bank account.

The announcement came as thousands of people began to gather in central N’djamena, the capital, for a rally in support of President Deby’s government. Rebels who attacked on the capital on Thursday were driven off, but the threat of a violent overthrow of the government has not diminished.

The United Nations announced Saturday it had completed the evacuation of all non-essential personnel from N’djamena and the eastern border with Sudan.

Photo: Chadian oil minister Mahmat Hassan Nasser