China National Petroleum Corporation asks Chad to drop $1.2bn oil dumping claim

China National Petroleum Corporation (CNPC) has denied breaking environmental rules in Chad’s oil sector and called on the government to cancel its $1.2 billion claim filed before an arbitration court in Paris.

The dispute erupted in July last year after Chad said it discovered large quantities of crude oil had been dumped into pits dug in the Koudalwa region, where CNPC has held licenses to several oil blocs since 2009.

In an escalation of the dispute, Chad cancelled five exploration licences held by CNPC.

CNPC said in a statement that the leaked oil consisted of a “small amount” and said its own analysis did not show penetration into the ground water.

The firm added that it was hoping for the “cancellation of this decision and an ongoing effort to resolve this negotiation amicably,” adding that the government has declined to provide the firm with a breakdown of damage to justify the large claim.

Chad became a crude producer in 2003, and production peaked at about 176,000 barrels per day in 2005 before declining primarily due to ageing wells in its Doba oil field.