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Exxon in negotiations with Chad over record $74 bln fine

PUBLISHED: Wed, 16 Nov 2016 07:29:01 GMT

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Exxon Mobil Corp is negotiating with Chad over a record $74 billion fine the U.S. oil company was told to pay by a court in the central African nation over unpaid royalties, Bloomberg reported on Tuesday.

Exxon has appealed the Oct. 5 court ruling, but the appeals court hearing has been delayed because of the talks, Bloomberg reported, citing a lawyer for Exxon. (bloom.bg/2fRpf5n)

Exxon declined to comment.

The court decision fined a consortium led by Exxon over 44 trillion CFA francs ($73.44 billion) – nearly four times BP’s Deepwater Horizon settlement and roughly seven times Chad’s annual gross domestic product.

The consortium, which includes Malaysian state oil firm Petronas and Chadian oil company SNT, were found to owe the country nearly 484 billion CFA francs ($808 million) in royalties, according to the court judgment.

It did not explain why the penalty amounted to more than 90 times that amount.

The unpaid royalties stem from a dispute over fees, sources in the Chadian Finance Ministry have told Reuters. The Finance Ministry, they said, is seeking a 2 percent royalty fee from the consortium, a rate the defendants have said is higher than the agreed level.

Petronas and SNT could not immediately be reached for comment.

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 ($1 = 599.1400 CFA francs)

 (Reporting by Vishaka George in Bengaluru and Ernest Scheyder in Houston; Editing by Sai Sachin Ravikumar and Sandra Maler)