A consortium led by ExxonMobil has been fined $75 billion by a court in Chad for alleged missing royalty payments.
According to court documents seen by Reuters, the court in Chad’s capital imposed a penalty of about $75 billion ( 44 trillion CFA francs) on the consortium tied to the alleged missing royalty payments.
The court ruled that the consortium also owes Chad’s government just over $822 million (484 billion CFA francs) in royalties.
The court did not explain why it imposed such a large penalty in its decision.
The record-breaking penalty is about seven times larger than Chad’s annual gross domestic product and over three times larger than the Deeepwater Horizon settlement.
Malaysia’s Petronas and Chad’s Société des Hydrocarbures du Tchad (SHT) are the other two members of the consortium.
The court also ruled that the consortium would be required to pay about $670 million pending any appeal or other forms of redress the companies may peruse, Reuters said.
An ExxonMobil spokesperson told the Financial Times that the company disagrees with the ruling and is “evaluating next steps.”
Sources from Chad’s finance ministry told Reuters that the ministry is seeking a 2 percent royalty fee from the consortium.
The consortium has argued that the royalty fee the finance ministry is seeking is larger than the fee that had been agreed on, Reuters added.
Exxon told the Financial Times that the dispute centers around “commitments made by the government to the consortium, not the government’s ability to impose taxes.”
The company added that it is important that all parties involved “abide by applicable law in order to achieve the desired long-term benefits envisioned when projects begin.”
Exxon’s projects in Chad included the Chad/Cameroon development, a project that includes oilfields in southern Chad and a pipeline system to transport crude oil to a marine terminal in Cameroon for export.