News

The Board of Directors of the Export-Import Bank of the United States (Ex-Im Bank) today gave preliminary approval to a $300 million loan guarantee to finance the export of equipment and services by Willbros Engineers Inc., Tulsa, OK, and numerous US suppliers to build a pipeline system to transport crude oil from southwest Chad through Cameroon to the Atlantic coast for export. The transaction has been referred to Congress for a statutory 30-day review period. The sponsors of the oil transportation project are three major international oil companies: Exxon Mobil, Chevron, and Petronas. Exxon Mobil is the project manager, to be assisted during pipeline construction by Stanhope Management, a subsidiary of Fluor Daniel Inc., Sugar Land, TX.

Willbros Engineers will engage in pipeline installation. Kellogg Brown & Root, Houston, TX will build pump stations and other facilities. IWL Communications, Houston, TX will build a telecommunications system to support the project.

The 1,050-kilometer, 225,000 barrels-per-day pipeline will serve three oilfields being developed in Chad — named Miandoum, Bolobo and Kome — as a separate project that is being financed by sponsor equity. Affiliates of Exxon Mobil, Chevron, and Petronas are developing the oilfields, which by their estimates contain 917 million barrels of proved and probable reserves.

This is Ex-Im Bank's first transaction in sub-Saharan Africa to use limited recourse project financing, a type of private financing where repayment comes from the dedication of project revenues.

This transaction enables Ex-Im Bank to support a project that will sustain U.S. jobs, concurrent with supporting increased trade with sub-Saharan Africa and at the same time help to alleviate poverty and support economic growth in Chad and Cameroon, said Ex-Im Bank Chairman James A. Harmon. I am pleased that a maximum effort has been made to ensure that Ex-Im Bank's environmental guidelines will be followed in the implementation of this project and that this segment of the project will be monitored throughout the duration of our involvement.

In compliance with Congressional mandates, Ex-Im Bank evaluated the environmental effects of the project, and determined it to be in agreement with the Bank's environmental objectives. Ex-Im Bank, with the project sponsors and participants, went to great lengths to identify and provide mitigation for the protection of the natural and human environment in the project areas. This included evaluating numerous pipeline routes before selecting the one with significantly reduced environmental and social impact. The sponsors, working with Ex-Im Bank, also agreed to develop and incorporate specific upgrades to reduce the project's emissions and effluents.

The selected route parallels to the extent possible already degraded and disturbed areas such as railroad beds, existing roads or areas already largely impacted by human activity. Project planners also adopted kilometer-by-kilometer adjustments to the selected pipeline's alignment to avoid ecologically and socially sensitive areas. The pipeline was rerouted outside sensitive areas in the Mbere Rift Valley and the Deng Deng Forest, and impacts to the Atlantic Littoral Forest received special study and mitigation efforts.

An environmental foundation including funds from the sponsors and the Government of Cameroon will support the conservation of two new forest reserves in Cameroon and set up a variety of programs benefitting the indigenous people affected by the project. A compensation plan will also be implemented.

The project includes a revenue management program which governs the use and distribution of oil revenues by the Government of Chad to decrease poverty and ensure that benefits from the project reach citizens, especially those living near the oil field area. Royalties will be deposited in an offshore escrow account and dedicated primarily to poverty relief programs.

During the construction phase of the project, Ex-Im Bank's guarantee will cover political risks only. Upon completion of the project, when oil production and exports commence, the guarantee will provide comprehensive coverage for both political and commercial risks. ABN Amro North America, Inc., Chicago, IL, and Credit Agricola Indosuez, Paris, are the guaranteed lenders.

Other lenders to the project include the International Finance Corporation (the World Bank's private sector financing arm), COFACE, France's export credit agency, which will support French exports for the pipeline, a commercial bank syndicate, and a potential bond offering.

Ex-Im Bank is an independent US government agency that assists in financing the export of US goods and services to developing markets around the world, through export credit insurance, working capital loan guarantees, loan guarantees, and direct loans. In FY 1999, Ex-Im Bank financed nearly $17 billion in US produced exports.