The central government of Chad revoked five exploration licenses from China’s state-owned CNPC over a dispute for $1.2 billion in environmental violation fines.
Chadian government officials said CNPC is refusing to pay the fine and that Chad will now take the fight to court.
Chad’s government is planning to press charges against CNPC in the country’s capital of N’Djamena.
A government spokesman said a delegation will also go to Paris next week to file a complaint at the international chamber of a French commercial court.
“Amicable negotiations are no longer possible. All efforts have been in vain,” Government Secretary General Abdoulaye Sabre said at a news conference.
Chad’s oil ministry said the move was intended to avoid more violations, not to make room for other companies.
The relationship between Chad and Chinese companies have been rocky since the country began developing its oil assets in 2003.
In March, 1,500 Chadians working for CNPC subsidiaries staged an eight-day strike to secure a 20 percent pay bump and safer working conditions.
CNPC has been exploring Chad since 2003 and has discovered five major oil plays.
Chad has proven reserves of 1.5 billion barrels and produced 105,000 bbl/d in 2012.
CNPC operates an integrated upstream and downstream project in the capital city of N’Djamena.
The N’Djamena refinery is a joint-venture between CNPC and Chad’s Ministry of Petroleum.
The refinery became operational in 2012 and has a capacity of 20,000 bbl/d.