Exxon Mobil Corp has announced that it is in talks with Chad concerning a $74 billion fine it was told to pay by the court over alleged underpayment of royalties relating to the Doba basin oilfields.

The U.S supermajor appealed the October 5 Chad court ruling, but the hearing has been postponed because of the talks, according to Bloomberg.

The court had also asked the company to pay $819 million in unsettled royalties, naming Petronas and Chevron alongside ExxonMobil in the verdict. This fine may represent an amount greater than the value of assets being held by the consortium in the Doba basin.

The consortium exported an estimated 120,000 barrels per day of oil through a pipeline to an export terminal at Kribi on Cameroon’s Gulf of Guinea coast. Due to this, the Finance Ministry is said to be demanding for a 2% royalty fee, which the companies have condemned for being greater than the agreed tariffs. Meanwhile, ExxonMobil has beforehand claimed that President Idriss Deby agreed to a modest royalty of 0.2% in 2005.

Output from ExxonMobil’s Doba basin in 2015 was about 73,000 bpd from 686 wells. The company is making efforts to maintain output through enhanced oil recovery methods, debottlenecking strategies as well as cost reduction initiatives.

Anita Fatunji