4338 - Chad-Cameroon Petroleum Development and Pipeline Project

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Environmental Review Summary

Project Number

4338

Company Name

TChad Oil Transportation Company, S.A., and Cameroon Oil Transportation Company, S.A.

Date ERS Disclosed

Dec 10, 2002

Country

Chad

Region

Africa

Date Revised ERS Disclosed

Jun 29, 2010

Environmental Category

A - Significant

Status

Completed

Previous Events

Approved : Jun 6, 2000
Signed : Jun 15, 2001
Invested : Aug 10, 2001

Sector

Oil and Gas Production (Includes Development)

Industry

Infrastructure

Department

Gbl Infrastructure & Natural Resources

Project Description

The borrowers of the IFC loans will be: (a) TOTCO, a special-purpose company incorporated in Chad as a joint-venture between the private sponsors, and the Government of Chad, which will own and operate the Chad portion of the pipeline export system, and (b) COTCO, a special-purpose company incorporated in Cameroon as a joint-venture between the private sponsors, and the Governments of Cameroon and Chad, which will own and operate the Cameroon portion of the pipeline export system. TOTCO and COTCO will transport crude oil to the export-loading terminal through their respective portions of the pipeline export system.

The total project cost is estimated at $3.5 billion: $1.5 billion for the oilfield development, to be funded by equity from the private sponsors; and $2 billion for a related pipeline export system, for which the IFC and the International Bank for Reconstruction and Development (IBRD or the World Bank) financing is proposed. The export system is expected to be financed by $100 million IFC A loans, up to $300 million IFC syndicated B loans, $600 million from export credit agencies and commercial banks, a $400 million bond offering, $112 million equity from Chad and Cameroon, to be funded by IBRD and the European Investment Bank (EIB), and $500 million in equity from the private sponsors.

Environmental and Social

Esso Exploration & Production Chad Inc (EEPCI) (the Project) develops Chadian oil resources located in the southern savanna region of the country. The output from the Oil Field Development Area (OFDA) reaches world markets through a 1070 kilometer export pipeline system with an offshore terminal at Kribi, Cameroon. Oil began flowing through the pipeline in mid-2003.

As the original oil fields were being developed, it became clear that more oil wells would be needed than originally planned to maintain the expected production level. Thus, more land has been required for the wells and their supporting infrastructure than initially expected.

A set of principles set out in the Chad Environmental Management Plan (EMP) approved prior to Project construction and guidelines to their implementation set forth in the Chad Compensation & Resettlement Plan (CRP) have directed the land use and compensation effort.

In June 2006, an independent evaluation was conducted on the Project’s CRP. The evaluation was jointly commissioned by the Project and the World Bank Group’s (WBG) IFC. A recommendation for land replacement strategies was the key theme of the evaluation. The report “Independent Compensation and Resettlement Evaluation (November 2006)” written by Barclay and Koppert is available on the IFC website.

In order to address the issues raised in the report and the pace of temporary occupied land reclamation and return to the local population, a Land Use Mitigation Action Plan (LUMAP) was compiled by EEPCI’s Environmental Management Group and finalized in close collaboration with the Environmental and Social Development Department of the IFC in early 2007. This Action Plan was posted on the IFC and EEPCI’s web sites in April 2007. The work described in the LUMAP has been divided into nine Action Areas that breakdown into discrete tasks.

This present document summarizes background of the documents being released by the International Finance Corporation (IFC) and Esso Exploration and Production Chad Inc. (EEPCI) on their respective web sites:
http://www.essochad.com
http://www.ifc.org/ifcext/africa.nsf/Content/ChadCameroon

The documents being made public as of July 2010, document the changes bought about through the LUMAP both on land use and livelihood mitigation from mid-2007 to end of the first quarter 2010. These include the various reports that have been regularly filed with the IFC plus summaries of in-house EMP operations procedures and tools that have been refined or developed as part of LUMAP implementation.
As of June 2010, the LUMAP is almost complete and certain documents will continue on an annual basis or as impacts dictate necessary. The present document reports the progress made by posting on the websites the results obtained for each of the nine action areas:

Identification & Assessment: Identify the affected population; assess and predict project impacts.

EEPCI developed an information system (EMP-IS) using the Microsoft Sequel Server relational database to incorporate detailed socioeconomic household surveys (based on Barclay/Koppert recommendation), measurement and location of fields used by the household and all of the information generated for land taken, compensation , reclamation and return, and resettlement options for the given household. Further details are given in Section 6

Land Use Impact Reduction: Manage the project to reduce land use impact.

In early 2006, the Project freed the necessary construction resources to begin clearing the backlog of land reclamation obligations so that the land could be returned to villages. Over the past three years, over 1000 hectares of land has been reclaimed and returned to the villages as viable farmland. The project footprint has not increased despite additional land needs since December 2005 and indeed has been steadily decreasing. Progress on land use and reclamation are reported in the Project reports published every quarter between 2000 and 2003 and twice a year from 2004 through today. The Project agreements call for quarterly project reporting up to the time of financial completion which occurs in October 2003 and semi annual after that time. Project reports are available on the www. essochad.com.

Resettlement: Resettle affected population if other strategies are judged inadequate to maintain individual livelihoods.

New options like land for land replacement and delegation of resettlement benefits to another household member were developed and included into EEPCI’s Land Management Manual as described in Section 7. Site Specific Plans were developed to identify village-level problems and to target specific households within the most impacted villages that are vulnerable because of Project land needs and require further assistance in livelihood restoration and support in their access to community resources.

Off-Farm & Improved Agricultural training: Improve effectiveness of the Off Farm Training alternative and Improved Agriculture techniques Training alternative to resettlement.

These resettlement options are intended to provide participants with sufficient training in a non-farm skill to generate income to supplement livelihood lost due to Project land take or to provide participants with sufficient means to implement techniques taught to increase crop production on remaining land. These two programs have been modified as described in Section 7 to improve likelihood that training will restore livelihood.

Individual compensation: Maintain and enhance individual land use compensation.

The In-Kind compensation catalog was updated and a third party compensation option was included in the revised version of the Land Management Manual (see Section 7). A complete review of all rates and items compensated was carried out in 2007. Market surveys are periodically conducted to check for inflation and update the compensation rates. The Compensation Rates (2008) are made available on the websites.

Community Compensation: Maintain and enhance community compensation.

Community compensation provides mitigation for Project impacts at village level in the form of infrastructure or development projects. A Supplemental Community compensation program to benefit the most affected villages in the original three-field area is underway using Chadian NGOs to help the villages determine their needs and select in kind compensation options from the EEPCI catalog using Participatory Rural Assessment Techniques (PRAT).

A catalog has been established to allow the villages to choose a type of infrastructure or a development project depending on the severity of their impact from project land needs.

The documentation has been made available to the IFC and EEPCI’s websites (PRAT Report (2008), Community Compensation Catalog).

Consultation & Communication: Consult and communicate with stakeholders.
In 2008, more than 259 public consultations were conducted locally, involving more than 7500 villagers. Much of the consultation and communication focused on the land use issue in the OFDA; Community Compensation using a Participatory Rural Assessment Process (PRAP); village land surveys; land return procedures; hiring procedures; safety and security issues. LUMAP results have been regularly documented in the semi-annual Project Reports (Chad project semi-Annual Update are made available on the EEPCI’s websites).

Monitoring & Organization Monitor results and manage livelihood strategies:
The EMP-IS is used to determine actual impacts on villages and households and to indicate mitigation measures to offset the impacts. These results are regularly documented in Quarterly Land Use reports and in the Annual Individual Livelihood Restoration Report made available on the IFC & EEPCI’s websites as part of this present document.
In addition, Key Lessons Learned from the LUMAP plus a summary of the proprietary Land Management Manual updated to include LUMAP changes are also being made public.
As a result of continuing reservoir challenges post-2007, EEPCI is planning to drill additional wells to maintain the forecasted production level. This “infill” drilling will require some additional land near or adjacent to existing well pads in the core field area.
To understand the possible incremental impacts of this infill program, EEPCI in agreement with IFC, commissioned independent consultants to do a focused Environmental and Socioeconomic Impact Assessment (ESIA) to evaluate the biophysical and social impacts of the additional land needs. The November 2008 study also evaluated the possible impact of additional mitigation measures that could offset additional land take. The ESIA as it stands covers the biophysical impacts possible, and the social impacts so far as can be understood from the LUMAP data gathered up till now. The ESIA has found so far no significant impacts that cannot be mitigated by the current EMP measures.

Availability of Full Documentation

The complete set of Category A documentation is available from the World Bank InfoShop:

World Bank InfoShop
1818 H Street, N.W., Room J1-060
Washington, DC 20433
USA

Telephone: (202) 458-5454 (USA)
Fax: (202) 522-1500 (USA)
E-mail: pic@worldbank.org

Hours of Operation: 9:30am to 5:30pm (Monday through Friday)

The complete set of Category A documentation is also available locally at the following locations:

Posted on project website: www.essochad.com and at appropriate locations (including project offices and reading rooms) open to the public in Chad and Cameroon and on IFC web site: http://www.ifc.org/ifcext/africa.nsf/Content/ChadCameroon.

As of July 1, 2010, a large amount of additional documentation has been produced related to the Land Use Management Action Plan (LUMAP) (of April, 2006 ) which was the result of an evaluation of the original Compensation and Resettlement Plan that was a component of the EMP.
IFC and Esso Exploration & Production Chad Inc (EEPCI) have been working together over the past three years to address the mitigation of social impacts that have resulted from additional drilling in the Oil Field Development Area (OFDA). This documentation is attached below and is also available on www.essochad.com and http://www.ifc.org/ifcext/africa.nsf/Content/ChadCameroon.

Please see the Environmental and Social Documentation Section below for a short summary of the background to this additional work and the attached documents which are listed below:

Village Impact Monthly Reports:
December 2007
January 2008
February 2008
March/April 2008
May/June 2008
Quarterly Village Impact Reports
Third Quarter 2008
Fourth Quarter 2008
First Quarter 2009
Second Quarter 2009
Third Quarter 2009
Fourth Quarter 2009
Annual Individual Livelihood Report for 2007 (January 2008)
Annual Individual Livelihood Report for 2008 (February 2009)
Annual Individual Livelihoods Report for 2009 (February 2010)
CRCP Entitlement Matrix Final Draft (February 2008)
Compensation Rates (2008)
PRAP report (October 2008) (French and English versions)

Site Specific Village Plans:
Dokaidilti (February 2008)
Ngalaba (February 2009)
Dildo (February 2009)
Mouarom (June 2009)
Danmadja (August 2009)
Bela (August 2009)
Begada (August 2009)
Mbanga (October 2009)
Madjo (November 2009)
Bero (March 2010)

Focused Environmental and Social Assessment – Incremental Impacts of the Infill Drilling Program for the Kome and Bolobo
Oil Fields in Chad, March 2010

The following complete set of Category A documentation has been released locally and to the World Bank InfoShop:
On June 6, 2000 IFC released the Environmental Impact Assessment and Environmental Management Plan (EMP), (including resettlement and compensation plans).
The Area-Specific Oil Spill Response Plans / Plan spécifique d’intervention en cas de déversement accidental d’hydrocarbures (Chad and Cameroon) have been prepared and publicly disclosed as per EMP requirements.

Environmental and Social Documentation

File Name	Actions
EEPCI - LUMAP - 2008 Annual Individual Report - Feb 09.pdf
EEPCI - LUMAP - Annual Individual Livelihood Report - 2007 - Final.pdf
EEPCI_LUMAP_2009_annual_individual_report.pdf
Focused_ESIA_20100318 Final March 2010.pdf
Begada Site Specific Plan - Final - 6 Aug 09.pdf
Bela Site Specific Plan - Final - 6 Aug 09.pdf
Bero Site Specific Plan Final _031710.pdf
Danmadja Site Specific Plan - Final - 6 Aug 09.pdf
Dildo - Site Specific Plan - 6 Aug 09.pdf
Dokaidilti - Site Specific Plan - 6 Aug 09.pdf
FINAL Framework for Site Specific Plan - Jan 2008.pdf
Madjo Site Specific Plan_012810.pdf
Mbanga Site Specific Plan - 19 Oct 09.pdf
Mouarom Site Specific Plan - 6 Aug 09.pdf
Ngalaba - Site Specific Plan - 6 Aug 09.pdf

This Environmental Impact Assessment (EIA) summary is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Any documentation which is attached to this Environmental Impact Assessment summary has been prepared by the sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following EIA is disclosed in accordance with to IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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