I think he needs a math lesson

From CNN we get this story about Chevron getting tossed out of Chad:

N’DJAMENA, Chad (Reuters) — Chad ordered U.S. energy giant Chevron and Malaysia’s Petronas on Saturday to leave the country within 24 hours for failing to honor tax obligations, in a move apparently motivated by a desire to earn more from its oil.

"From tomorrow, the representatives of Chevron and Petronas must leave Chad and close their offices," Idriss Deby, president of the central African nation, told a government meeting.

OK, I can understand this – if you don’t pay, you don’t play.  However, as they say on infomercials – "But wait!  There’s more!"

The surprise move followed Chad’s decision to create a new national oil company, which it said should become a partner in the country’s existing oil-producing consortium, led by U.S. major Exxon Mobil and including Chevron and Petronas.

Landlocked Chad, which began pumping crude in 2003, produces around 160,000-170,000 barrel per day but most of its people remain poor.

At 160K barrels per day, figure round number of $70/barrel, that’s $4.01 billion a year.  How much is Chad supposed to get of that amount?

Under the 1988 agreement with the foreign consortium, Chad gets 12.5 percent of the wellhead value of total production, before quality discount and the cost of sending it through the pipeline to Cameroon’s Kribi terminal.

Well, 12.5% comes out to be….$511 million.  Well, if I was supposed to get that amount, I’d be a tad irritable, too, if it wasn’t coming into my bank account!  Throw the bums out!

Oh, wait, there’s more!

"In less than three years of exploitation the consortium has earned $5 billion for a $3 billion investment. In contrast, Chad has just received crumbs: $588 million, just 12.5 percent."

OK, what am I missing?  The deal is supposed to be 12.5% – it seems like (taking into account rough numbers), things are ok, right?  So what is he complaining about?  The companies put in $3 billion bucks (more than Chad can afford) to get the oil out, get $5 billion in revenues.  At the recently announced numbers of about 10% profitability, that means the nasty oil companies earned about $500,000,000.  Large numbers, but it means that the oil companies have to get this same rate of production, at the same price / barrel, for another 5 years to cover the cost of the infrastructure ($3 bil).

Now the government of Chad is just taking their property. AND THEY WERE EARNING MORE THAN THE OIL COMPANIES WHO WERE DOING THE WORK!

Oh, there’s this:

A Transparency International survey last year ranked Chad the world’s most corrupt state

Seems to be epidemic in the African continent.  So where’s all the money going?  And does he really think that his government can run the oil industry by itself for long (see Mexico and Venezuela for examples).

Oh, there’s this – I guess the massive profiteering-at-the-expense-of-the-American-consumers sized profit kinda gets cut a bit too.  Do ya think we’ll see this screetched from the News programs for days on end?

If you think so, I got this little plot of land near the Equator……