The ChadCameroon Petroleum Development and Pipeline Project

1
The Chad-Cameroon Petroleum Development and
Pipeline Project

• Professor Doug Cerf
• Donald Bren Graduate School of Environmental
  Science and Management
  
• Environmental Risk Management (ESM 286)
• Winter 2008

2
ChadCameroon Petroleum Development and Pipeline
Project

• A excellent combination of large scale finance
  and environmental, social and economic risk
  issues
  
• 4 Billion development project
• A unique opportunity to alleviate poverty in one
  of the poorest countries in the world through
  economic development
  
• Project entails substantial environmental and
  social risk.
  
• Will the Chad government use new found wealth for
  poverty alleviation?
  
• Will the new found wealth be used for
  oppression?
  
• Will the revenue management be effective and
  enforceable?
  

3
Reasons why World Bank participated in the deal

• Mainly an opportunity to alleviate poverty
• Opportunity to enforce environmental standards
• Minimize the impact on the indigenous people

4
Large Scale Project Considerations

• Structuring
• Valuing
• Managing Risk
• Financing

5
Case questions

• How are the sponsors financing this deal? How
  does the financing of the Field System differ
  from the financing of the Export System?
  
• What is the World Bank/IFCs role in this deal?
  Are they likely to be successful?

6
Case questions

• Analyze the risks and the returns to Chad,
  Cameroon, and the Private Sponsors. How were the
  returns calculated? Are the risks and the returns
  fair from each partys perspective?
• Will the Revenue Management Plan work? Are there
  aspects of the plan that you think should be
  changed?
  
• Would you approve the deal as a World Bank/IFC
  board member?