Glencore to fund Chad's $1.3bn oil purchase

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Glencore12345 REUTERS The logo of commodities trader and mining group Glencore.

N'djamena - Chad has selected Glencore to finance its purchase of Chevron's $1.3 billion oil assets, the oil ministry said in a statement, as the commodities trader deepens its ties with the central African country.

The US oil major said on Friday it had sold its stake in an oil concession and pipeline system in southern Chad, known as the Doba Project, to the government to focus instead on its top investment priority in Texas shale oil.

“For the financing, the Republic of Chad, after having sought the support of several lenders and studied their offers, has decided to retain Glencore Energy UK Ltd,” the oil ministry said in a statement dated June 13.

It said the loan, backed by crude oil exports, will be repaid over a period of four years.

Glencore declined immediate comment on the deal.

The Doba project includes a 25 percent in the Doba oil concession as well as minority stakes in two companies in a pipeline project linking Chad to the Atlantic coast via neighbouring Cameroon.

ExxonMobil and Petronas are also stakeholders in Doba.

The Financial Times reported that Deutsche Bank, Natixis and Credit Agricole as well as regional development lenders were also participating in the Glencore deal.

Top commodities trader Glencore has been expanding in the poor, landlocked country since 2012 when it agreed to invest more than $300 million in oilfields and signed a deal to export crude oil from 2013.

In April, it agreed to buy Chad-focused oil company Caracal Energy for about 800 million pounds ($1.34 billion).

Chad produces around 105,000 barrels of oil per day, according to the US Energy Information Administration, with output in decline due to maturing fields. - Reuters

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