Economic development in Chad and Cameroon

TOTCO Operational workforce now 100 percent nationalized

Project workforce by year-end 2016

• Chadian and Cameroonian nationals employed by EEPCI, COTCO, TOTCO and their contractors: 3,355
• Percentage of total workforce that is Cameroonian and Chadian: 94.5%
• Wage payments to Chadian workers in 2016: 30 billion FCFA ($51 million)
• Wage payments to Cameroonian workers in 2016: 10.5 billion FCFA ($18 million)

Tracking 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 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 day-to-day jobs where they work Monday through Friday shifts 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.

Skilled jobs include positions such as control room operators, oilfield technicians, construction workers, machinery, electrical and instrumentation operators, EMP monitors and welders. Examples of semi-skilled jobs include food service assistants, security guards and welder helpers.

Deepening relationships with local communities to maintain the pipeline

While historically COTCO retained contractors to maintain the pipeline right-of-way (ROW), in 2016 the company began engaging Locally Formed Organizations (LFOs) set up by communities located near the pipeline to do this work. LFOs are officially recognized groups of villagers who have organized themselves into a collective that combines their skills and knowledge in pursuit of greater efficiency and productivity.

Previously the workers were local, but the work was managed by Cameroonian companies from outside the area. This new arrangement has saved the company money and increases the amount of COTCO’s ROW maintenance budget that is injected directly into the communities, while also increasing villager self-reliance.

COTCO made this change after determining that over the years the local communities had become very familiar with the requirements of this work and with the project’s safety standards and procedures, since so many had worked for the project. The company also concluded that these villages and towns had the capability to manage these projects without the need for contractors.

The main activities involved are grass cutting, foot patrols and, in some areas, boundary marker fabrications and installation. LFOs must follow COTCO’s safety practices, and their work is overseen by a project representative to ensure that it is conducted safely and completed satisfactorily.

In addition to grass cutting and other ROW maintenance and monitoring activities, Yebi (near Pump Station 3), like many other villages along the ROW has been contracted to manufacture and place ROW boundary indicators. The photographs in this story show workers from the village of Yebi fabricating boundary markers on behalf of the local LFO.

New contracting process benefits local villages

By creating a Locally Formed Organization (LFO), the villages of Biombe and Ndoumba Kanga, both located near Pump Station 3, were two of the communities that contracted with COTCO to perform work in the pipeline ROW. COTCO contracted with them to cut grass and fabricate and place boundary indicators along the ROW. Leaders from both villages have reported multiple benefits from the experience.

Cameroonian entrepreneur helps local communities work with COTCO

Chadian company grows by helping EEPCI cut costs and increase efficiency

SENEV Tchad-SSI is a N’Djamena-based company that has grown significantly in size and capabilities since it began providing services to EEPCI in 2003, the year oil production began. These services have included providing vehicle drivers and maintenance of production camps.

As part of its 2016 efforts to become a leaner and more cost efficient company and to increase local hires whenever possible, in February 2016, EEPCI awarded SENEV the contract for camp maintenance and waste management services at Komé 5, the project’s operations headquarters in the OFDA, replacing a foreign contractor. Senev’s team at Komé 5 is responsible for water treatment, waste management, plumbing, electrical work and air conditioning for the cafeteria, residences and airport. In December, SENEV’s mostly Chadian maintenance team consisted of 42 skilled and semi-skilled workers.

Senev’s total employment has grown to over 160 with 140 working on EEPCI assignments. Wangba Ahorombel Yaro, SENEV’s Human Resources Director, attributes his company’s success in large part to what it has learned from EEPCI and adopting many of Esso’s values. He said, “We made the vision of ExxonMobil our vision” and pointed out that SENEV’s corporate goals are:

• Safety — “Nobody Gets Hurt”
• Protecting the environment — “No Spills”
• To operate on a basis of honesty and integrity in all day-to-day business dealings
• To create a safe working environment promoting and increasing local staff participation, furthering their acquired skills
• Continuously improving the maintenance procedures and applying best practices

At the end of the year SENEV was working on a special project: fabricating 400 desks and 57 blackboards that EEPCI plans to donate to schools throughout the OFDA. Over 50 classrooms will receive the furniture. This work will result in a significant benefit to the schools and students, while also giving 26 Chadians temporary jobs for two months. Every year the SENEV maintenance workshop performs a similar project for EEPCI. In addition to the furniture, EEPCI will also donate school supplies such as notebooks, pens and pencils to students directly. SENEV also fabricated 60 waterproof covers for mattresses slated to be donated in Q1 of 2017 to hospitals throughout the OFDA.

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 2016, the project had generated nearly $12 billion in revenues for Chad, including 2.7 million barrels of oil generated as royalties-in-kind in 2016 alone. Revenues are affected by many factors, including the price of crude oil, operational costs and capital investment.

Brent Crude is a major benchmark price for sweet light crude oil worldwide. This chart shows the volatility of oil prices since 2003 when production began in Chad. While Doba oil is priced somewhat lower than Brent Crude, Doba generally tracks the movement of Brent. For many years since 2003 the price of Doba has exceeded expectations, significantly increasing revenue to Chad.