An Exxon Mobil-led consortium was fined $74 billion in unpaid royalties by Chad in a ruling by the High Court in in the central African country on Wednesday.
The fine is five times more than Chad’s gross domestic product, which is estimated to be $13 billion, Bloomberg reported. The High Court in the capital, N’Djamena, announced its ruling after the Finance Ministry complained that the consortium led by Exxon Mobil Corp. had failed to meet its tax obligations, Bloomberg noted.
In addition to the fine, the court also demanded that the Texas-based oil seeker pay $819 million in other royalties that were overdue, according to documents.
Jeffrey Atik, an international law professor at Loyola Law School in Los Angeles, told Bloomberg that Chad is unlikely to collect the entire fine.
“Nobody is going to cooperate outside of Chad in enforcing this judgment,” Atik said. “This leaves Exxon exposed to possibly losing everything it has inside Chad but that’s such an extraordinary number, I can’t imagine the assets they have there are worth that much.”
The fine is the biggest ever imposed on an energy company, with the last penalty of this magnitude being in the amount of $61.6 billion, which was demanded of BP after the Gulf of Mexico disaster that killed 11 workers and left a spill of over 3 million barrels of oil, RT reported.
Exxon declined to comment on the matter as they’re currently figuring out their next steps in the aftermath of the Chadian courts ruling — a ruling that this American oil giant completely disagrees with, RT noted.
The company has been pumping oil in the African country since 2003, administering a pipeline that transfers Chadian oil to Cameroon to be further exported, RT noted.