Chad Took ExxonMobil’s Assets and Is Still Paying For It

CHAD · ENERGY

Chad nationalised oil assets ExxonMobil had agreed to sell to Savannah Energy, ending a long ownership dispute.

The move cancelled Savannah’s US$407 million claim to the fields.

Chad now lacks the investment new fields would need, and old ones are ageing. Oil still pays for about 40 percent of the budget.

About 45 percent of Chadians live in poverty.

What the Chad oil nationalisation did

ExxonMobil had operated in the Doba basin since the Chad-Cameroon pipeline opened Chadian crude to export markets in the early 2000s. Its exit was meant to be a sale.

Savannah Energy, a London-listed independent, agreed in 2021 to buy the assets for around US$407 million. Chad’s government disputed the sale, and the case went to arbitration in Paris.

The state ultimately nationalised the assets itself, ending Savannah’s claim to them. The immediate fiscal effect was positive, because the government captured the production directly.

Foreign investors read the years-long episode as a statement about contract security. New capital has not arrived to replace what left, and output is at risk as fields age without it.

An oil economy that never became an oil country

Chad produces around 125,000 barrels a day, which generates roughly 40 percent of government revenue. That is a large fiscal share from a modest absolute output.

The social indicators have not followed. Close to 45 percent of the population lives in poverty, and around 80 percent depend on subsistence farming.

The Chad-Cameroon pipeline was originally structured with World Bank oversight and a revenue management law intended to ring-fence spending for development. That framework broke down years ago.

It remains one of the most studied failures in resource governance. The lesson usually drawn is that ring-fencing revenue does not survive a government that decides otherwise.

The pipeline itself still runs to the Cameroonian coast at Kribi. Chad remains dependent on a neighbour for every barrel it sells.

Resource nationalism, and what it actually costs

Chad is not alone in this. Niger and Mali have moved against foreign mining operators, and Kenya recently ordered Tata Chemicals out of Lake Magadi.

The argument for these moves is real. Long concessions signed by weaker predecessor governments often deliver very little to the host state.

The cost shows up later and is harder to see. It appears as the investment that does not arrive, the field that is not appraised and the buyer that walks away.

Latin American readers have watched the same cycle run in Bolivia, Venezuela and Argentina. Nationalisation raises revenue in year one and lowers capacity by year five.

The distinction that matters is whether the state can operate what it takes. Chad’s national company inherited fields it had never run.

The Sudan war is now a Chadian fiscal problem

The UN refugee agency counts around 1.5 million refugees in Chad, roughly 940,000 of them from Sudan’s war. The country was already among the poorest in the world.

The eastern provinces bearing the load have the least infrastructure and the thinnest administration. Humanitarian financing has not kept pace.

The border closed in February after clashes killed five Chadian soldiers. In August, Chad said a Sudanese air strike killed twelve people at a border fuel market.

President Mahamat Idriss Déby Itno was awarded the 2026 African Peace Prize partly for accepting the refugee inflow. The recognition does not pay for it.

Where the country is trying to go instead

The IMF projects 5.2 percent growth in 2026. Non-oil sectors are expanding, which helps spread the gains beyond the oil industry.

The government has been courting industrial investment. Last year it gave ARISE, a foreign industrial-park developer, land for a new zone.

It also accepted a Chinese grant. We covered this at the time.

It also said it will remove entry visas for all Africans from 2027. This is an unusually open step for a landlocked country with security worries.

These are attempts to build something that is not a barrel. They are also small next to the hole a future decline in oil output could leave.

Cotton and livestock are the realistic non-oil exports. Both need the road and power investment that oil revenue was supposed to fund.

What to watch next

The first thing is production data, because the central claim about nationalisation is that capacity falls without new investment.

The second is whether any international operator takes new acreage, which would signal that the contract-risk premium has come down.

The third is the Sudan border, where a fiscal problem and a security problem are now the same problem.

Frequently Asked Questions

What happened with ExxonMobil in Chad?

Chad nationalised oil assets that ExxonMobil had agreed to sell to Savannah Energy for around US$407 million, after years of legal dispute.

How much oil does Chad produce?

Around 125,000 barrels a day, generating roughly 40 percent of government revenue.

How many refugees are in Chad?

Around 1.5 million, according to the UN refugee agency, roughly 940,000 of them from the war in Sudan.

What is Chad’s growth outlook?

The IMF projects 5.2 percent growth in 2026 as non-oil sectors expand.

Has Chad closed its border with Sudan?

Yes. The border was closed in February 2026 after clashes killed five Chadian soldiers.

Connected Coverage

Chad tries to build a non-oil economy. This is covered in the industrial zone and Chinese grant.

The plan to drop entry visas is also part of it. The resource contest around Chad is tracked in Africa: The New Scramble.

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