The Chad/Cameroon Development Project has generated over $12 billion in revenues for Chad since oil began to flow in 2003, with the country investing much of this income in Chad’s economic, social and cultural development sectors. In addition to completing dozens of infrastructure development projects across the country, Chad has achieved two major development milestones that are due in large part to its expanding resources extraction sector:
- The entry of Chad’s national hydrocarbon company, La Société des Hydrocarbures du Tchad (SHT), into the Consortium which owns the EEPCI/TOTCO/COTCO project.
- Acceptance as a full member by the global transparency organization, Extractive Industries Transparency Initiative (EITI), which promotes accountable management of natural resources by requiring members to “disclose information on
tax payments, licenses, contracts, production and other key elements around resource extraction.”
In Cameroon, the project has injected hundreds of millions of dollars into the economy through local employment and purchases, and it has invested many millions of additional dollars in community development projects and large scale enterprises like the
recently-completed Lom Pangar Pipeline Modification Project. The latter is enabling the Cameroon government to build a hydroelectric
dam that will increase drastically the amount of electric power available for growth by industry in Cameroon for many years to come.
Local employment: developing a pipeline of talent
Careful selection, long-term planning, daily training and mentoring have been keys to building a competent and professional Chadian and Cameroonian workforce over the last decade.
These activities are part of the project’s talent development strategy, which was developed and is overseen by a committee of senior managers from across the company. The committee analyzes organizational structures, functional needs and employee performance to make informed decisions on strategic placement and employee development. The project uses a sophisticated rating process and merit-based system designed to recognize and reward the best performers with career growth opportunities and competitive compensation.
This process has resulted in increased nationalization and high employee retention rates. Over 88% of both EEPCI and COTCO’s employees are Cameroonian or Chadian and almost half of EEPCI’s senior managers are Chadian. COTCO’s land-based operations are now completely managed by Cameroonians, and 80% of the company’s management positions are held by Cameroonians.
As the number of expat employees continues to decrease, the project has instituted a new mentoring program that involves most of its senior expatriates and national employees. The goal is to encourage even more upward mobility of Chadian and Cameroonian nationals into senior management and supervisory roles. These executives formally pair up with the employees with the highest leadership potential to provide education and perspective on what it takes to be a successful manager within the organization and field of expertise.
Christian Sollo, Human Resources Manager, COTCO
“Our philosophy is to develop employees to their maximum potential by helping them achieve the high expectations they set for themselves. Having started with a number of well-educated and motivated candidates, we now have a workforce that is able to adapt to changing environments, manage themselves and others, and ultimately take over all the positions which were previously held by expats. It speaks to the capability of the workforce and is a major source of pride for us.”
Spotlight: Borkam Ban-Orngue
In 2014 EEPCI named Borkam Ban-Orngue, a Chadian first hired in 2002 as an analyst in the human resources department, to be the company’s HR Manager. As is often the case at EEPCI, Borkam’s career was characterized by a variety of roles within the company, providing him with a broad set of experiences and mentoring, all of which has prepared him for his new role.
“EEPCI provides employees with many opportunities to grow – through participation in meetings, training and conferences and, of course, mentorship. For most of my responsibilities, there was almost always an ex-pat supporting and mentoring me. I am certainly lucky to be where I am in my career, but this company makes good decisions in putting the right people in place as managers and mentors, and this is what created the conditions for my development here.
EEPCI is also focused on cross-functional development and long-term succession planning. Our people here have learned and grown so fast. It becomes clear how effective our nationalization program has been when one remembers that in the past we were sending Chadian nationals abroad to learn. But now we are sending Chadian nationals around the world to contribute, to teach and compete as expert expatriate workers around the world.”
Spotlight: Emmanuel Ndjiki
Emmanuel Ndjiki was recently promoted to Superintendent of the Export Transportation System (ETS) at COTCO. In this role, Emmanuel is responsible for managing all onshore and offshore operations in Cameroon. Emmanuel started at the company in 2000 as a Right of Way Assistant. His promotion is indicative of the company’s steady progress in meeting its national content objectives.
“I wasn’t expecting this position would be nationalized when it was, but I was glad for the opportunity, and similarly for the support that my ex-pat predecessor provided during the transition. This is the ExxonMobil way
– a unique company when it comes to nationalization as it recognizes that not only does it save costs, but is also the right thing philosophically.
I have a very strong team supporting me. To be an effective manager, you have to understand that your people are your first asset, and you have to let them know that you trust them and will help them develop.”
Context: reporting local employment
The Project Update Report provides statistics on local employment on the basis of Full Time Equivalents or FTEs. Reporting by FTEs makes it possible to account for the wide diversity of work shifts and rotations of the project’s workforce, as well as the seasonal variations in the types of jobs available with the project.
- Many of the project’s workers are on rotator schedules, which often include working in tandem with another “back to back” worker. Rotators typically work 28 days on and 28 days off, or a similar pattern, but when on duty they work seven days a week, 12 hours per day.
- Other workers have daily jobs where they work Monday through Friday for shorter days but are on duty for most of the year with no rotation breaks.
- Another category of workers, often hired from villages near project facilities, have temporary contracts and work only a few weeks at a time in order to complete special projects such as maintenance of the pipeline right of way.
Converting all these employee work patterns into standard Full Time Equivalents based on actual hours worked yields a consistent and more accurate picture of the project’s local employment.
- Chadian and Cameroonian nationals employed by EEPCI, COTCO, TOTCO and their contractors: 6,492
- Percentage of total workforce that are Cameroonian and Chadian: 88%
- Percentage of Chadians and Cameroonians with management/supervisory, skilled and semi-skilled jobs: 79%
- Wage Payments to Chadian Workers: 60 billion FCFA ($126 million)
- Wage Payments to Cameroonian Workers: 6.0 billion FCFA ($12 million)
Lom Pangar: supporting economic development in Cameroon
In July 2014, COTCO completed the Lom Pangar Pipeline Modification Project, an $86 million, multi-year construction effort undertaken at the request of the Cameroon government, on time, safely and under budget. Starting work in 2012, hundreds of project workers modified two 13 kilometer pipeline sections in Cameroon’s protected Deng Deng forest. This work was necessary for the Lom Pangar Hydroelectric Project, one of Cameroon’s largest economic development efforts, to be built by the government. COTCO’s project modified the pipeline to be submerged through part of a 590-square kilometer reservoir, once a massive hydroelectric dam is constructed at the confluence of the Lom and Pangar Rivers in eastern Cameroon. When the dam is completed and the reservoir filled in, only minimal traces of the pipeline’s presence will remain.
Jean-Michel Tolen, formerly Lom Pangar Project Manager (currently Commercial Manager), COTCO
“It was important to us to be able to complete this modification on time because the larger hydropower project depended on us to move forward, and we had made a commitment to the government. This was a highly
visible project with a fixed budget due to the World Bank financing and cost sharing arrangement between COTCO and the government, but it was managed very efficiently thanks to good collaboration by all parties.”
Spending with local businesses
- 2014: 34 billion FCFA ($72 million)
- Total spending: 1.1 trillion FCFA ($2.2 billion)
- 2014: 48 billion FCFA ($100 million)
- Total spending: 614 billion FCFA ($1.3 billion)
Celebrating the completion of Lom Pangar pipeline modification
Hundreds of senior Cameroonian government officials and business leaders gathered in the Cameroonian capital of Yaoundé on 13 November to celebrate the successful on-time completion of the Lom Pangar Pipeline Modification Project, which was jointly funded by the government of Cameroon and COTCO. During the ceremony, COTCO’s General Manager, Christian Lenoble, presented Cameroon’s Minister of Finance with a check for the 22 Billion FCFA ($35 million) to be returned to the government due to the work having been completed under budget and as COTCO’s contribution to the project.
The collaboration between the project and government was superb. To me, it was a key factor in our success in completing our work on time and within budget.
Christian Lenoble, General Manager, COTCO/TOTCO
We are proud to say this has been possible because of the professionalism and quality of COTCO, the company in charge of the work. Today we can celebrate the public-private partnership. And as a result, we can soon be proud to say that in the very near future our energy supply will meet the level which the President of our Republic, his Excellency, Paul Biya, has set to make sure the continued development of our economy is a reality.
Alamine Ousmane Mey, Finance Minister, Republic of Cameroon
COTCO contracted with more than 50 Cameroonian companies in 2014.
Supporting local businesses to serve a growing industry
EEPCI, COTCO and TOTCO work with dozens of international and national vendors that support project operations. All vendors must meet a high standard of operational integrity before they are eligible to become a supplier. The project has invested significantly in supporting its Chadian and Cameroonian vendors to fortify their business practices over the years. This effort has contributed to strengthening Chad’s services and supply industry, and with the emergence of Chad’s petroleum industry, these national vendors are now well positioned to support additional oil producers.
Miyal Ngarianouba, Buyer, EEPCI
“Chadian vendors found it difficult to meet the rigorous safety and management criteria that we required throughout our supply chain, but we provided all eligible local vendors with training and support. Now they are familiar with and understand the importance of our protocols, which is helpful not only so they can do business with us, but because it helps their businesses operate more effectively.”
Lom Pangar: indirect economic impacts on Kepere-Deng Deng
The pipeline crosses several kilometers of the Kepere-Deng Deng canton with 13 villages and approximately 4,000 inhabitants near the Lom Pangar area. During the pipeline modification, COTCO workers and contractors, equipment and vehicles all passed through the area to access the worksite, creating direct and indirect economic impacts. Some benefits included an improved road, local hiring, injection of cash into the local economy and new local markets to provide goods and services to the hundreds of workers employed on both the pipeline modification and the dam construction project.
Kassala Dang Roger Innocent, Canton Chief, Kepere-Deng Deng
“The effects of this pipeline modification have been a big bonus, like the upgraded road, which increases access to bigger towns. Also, our area supplied much of the workforce for the modification, which provided good paying jobs. Thankfully, now some other companies are taking cues from COTCO in their hiring practices.”
The emergence of local markets: Komé Atan
In addition to direct project spending with local suppliers of goods and services, new village markets have been created and existing ones expanded in areas where project employees live as they spend their salaries on needed goods and services. One example is Komé Atan, a village that has grown into a thriving marketplace where local residents and other Chadians come together to service project employees.
Djamal Mahamat, owner, Alimentation Wadi – Fira, a store in Komé Atan
“I have been in business here in Atan since 2003 – the beginning of the project. This town used to be a small village, but now with this project we have grown significantly. Even though I moved here from N’Djamena, I have my fields here; I married here; I worship here; and I had my children here; I am home here. As long as oil is here, then people will come and business will continue to grow.”
Host Country Revenue
Chad’s oil revenues come from royalties on oil sales, corporate taxes, income related to pipeline ownership and other permits, duties and taxes. By the end of 2014, the project had generated more than $12.5 billion in revenues for Chad, far exceeding initial expectations.
Chad achieves EITI compliance
The Republic of Chad accomplished an important and long held objective in October 2014, becoming a full member of the Extractive Industries Transparency Initiative (EITI). EITI is a global coalition of private, public and civil society organizations that seeks to increase transparency and accountability for the management of revenues derived from natural resources. The new status certifies that Chad is now compliant with the organization’s standards for transparency, meaning that interested stakeholders have access to important information about how the country’s resources are managed.
Esso welcomes this milestone decision by the EITI Board. This accomplishment would not have been possible without the ownership and full support of the national government. We believe transparency is essential to support economic growth, increased opportunity and a better standard of living for all citizens.
Scott Miller, General Manager, EEPCI
Oversight of Chad’s Oil Revenue
Recent changes to Chadian law now give additional oversight responsibilities to the Collège de Contrôle et de Surveillance des Ressources Pétrolières (Petroleum Revenue Oversight and Control Committee), a Chadian government watchdog committee in charge of overseeing oil revenue appropriation. The organization, which was originally established to monitor revenue generated by EEPCI and whose president sits on the board of EITI, is now empowered to oversee revenues generated from all oil producers.
This new law is a very important one for our organization. While Chad’s production is dynamic, our oversight is now constant, and we have even more of a mandate for responsible oversight.
Mahamat Ramadane Dagache, Public Procurement Specialist, Petroleum Revenue Oversight and Control Committee