Chinese Petroleum signs deal with Chad

Chinese Petroleum Corp (中油) said it signed an initial agreement with Chad's government to jointly explore for oil and gas.

State-owned Chinese Petroleum and the government of the African country "expressed willingness to cooperate," Liao Tsang-long (廖滄龍), a spokesman for the company, said in a phone interview.

Taiwan imports almost all the crude oil and about 92 percent of the natural gas it uses.

Chinese Petroleum aims to increase income from exploration and drilling operations to one-third of company profits. It is expected to generate about 25 percent of its profit from production of oil and gas this year in countries including Indonesia and Ecuador, Liao said.

Chinese Petroleum plans to invest NT$5 billion (US$148 million) in Chad, a Chinese-language newspaper reported yesterday. Liao couldn't confirm the figure.

The paper said Taiwan was forced to provide a multi-million dollar aid package to Chad to stop the central African ally from switching recognition to China. Chad, which re-established formal relations with Taiwan in 1997, is one of the 26 countries that maintain formal diplomatic ties with the nation.

The paper cited sources as saying that foreign ministry officials had been divided over whether to grant Chad NT$350 million in aid after it threatened to sever ties with the nation. The ministry eventually agreed on the financial package after Chad called off a cooperation project with Chinese Petroleum to operate oil fields there, the paper said.