Petroleum Development and Pipeline Project Team 2: Yusuf Akkoca Tom Bloom Karen Delton Shweta Hire Eric Johnson David Mahzonni

Overview of Project Costs and Financing Project Costs: $3.723 billion, split into two parts: $1.521 billion - Field System $2.202 billion - Export System Project Financing: Field System – Corporate Finance Export System – Project Finance

Why do you think the financing of the Field System is using Equity? Field System is fully owned & financed by the Upstream Consortium (ExxonMobil/Petronas/Chevron) Minimizes Risk: Chad and Cameroon do not have ownership in the Field System ownership.

Why do you think the financing of the Export System using Debt? Export System financed with mix of equity and debt to off set political risk. Host governments contribute their own equity by taking out loans.

Analyze the risks and returns to Chad, Cameroon and the Private Sponsors Environmental Risks Pipeline would cross 17 rivers 5 habitat zones w/ rare plant life & endangered species Forest regions, which are home to 11,000 Bakola people (pygmies) Pygmies rely on land, vegetation, and wildlife to survive Atlantic Littoral Forest zone in Cameroon at risk for deforestation & oil spills Lob Waterfalls flows directly into the ocean, spill could cause irreversible environmental damage Plans to bury pipeline increase risk for ground water contamination, and make repairs more difficult Oil pipeline leaks can go undetected at 2,000 gallons per day

Analyze the risks and returns to Chad, Cameroon and the Private Sponsors Social Risks Risks indigenous populations would be forced to resettle making it difficult to re-establish their livelihoods. Political Unrest Political Risks Cameroon will close off access to pipeline Chad demanding higher prices, Cameroon might not be able to acquire oil.

Analyze the risks and returns to Chad, Cameroon and the Private Sponsors Nationalization Government could take over the Field System Political Risks Cameroon will close off access to pipeline Chad demanding higher prices, Cameroon might not be able to acquire oil.

What is the World Bank/IFC’s role in this deal? World Bank has experience and knowledge working in these risk filled environments World Bank has strong mission: “To stimulate economic development and alleviate poverty in its 183 member countries”. Five year study, with extensive research and communication with all stakeholders Developed the Revenue Management Plan

What is the World Bank/IFC’s role in this deal? Developed contingency plans for: environmental impact, indigenous people, & long-term sustainability. World Bank established capacity- building programs to develop fiscal, legal, regulatory, and managerial infrastructures. Provide funding of equity ownership for host countries Provide support for bringing in foreign investment

Is the World Bank likely to be successful? No, the World Bank’s goal is to reduce poverty While well intentioned, it will be hard to change a corrupt government The World Bank will not succeed by supporting this one project

Will the Revenue Management Plan work? No Lack of details about permissible expenditures Insufficient oversight No local support Chad has the authority to update revenues allocations Future World Bank loans are contingent on the success of this project

Are there aspects of the plan that you think should be changed? Better oversight More details

Would you approve the deal as a World Bank/IFC board member? Yes It is worth the attempt, it is Chad only shot of success.

Thank you! Team 2: Yusuf Akkoca Tom Bloom Karen Delton Shweta Hire Eric Johnson David Mahzonni