N’DJAMENA ExxonMobil said on Thursday it disagreed with a court decision in Chad that fined a consortium led by the U.S. oil major over 44 trillion CFA francs ($75 billion) – nearly four times BP’s record Deepwater Horizon settlement – over unpaid royalties.

The decision would see the central African nation awarded the equivalent of nearly seven times its annual gross domestic product.

“We disagree with the Chadian court’s ruling and are evaluating next steps,” Exxon media advisor Todd Spitler said in an emailed response to a Reuters request for comment.

Malaysian state oil firm Petronas and Chadian oil company SNT, the two other consortium members, were not immediately reachable for comment.

The court judgment released on Wednesday found that the companies owed nearly 484 billion CFA francs in royalties to the Chadian government. It did not explain why the penalties amounted to more than 90 times that amount.

The court document also stated that the companies were required to pay roughly $670 million pending any eventual appeal or redress they might choose to pursue.

Officials from Chad’s finance ministry and customs office declined to comment on the court decision, which resulted from a complaint brought by the ministry.

Sources in the finance ministry have previously said that the unpaid royalties stem from a dispute over fees.

The finance ministry, they said, is seeking a 2 percent royalty fee from the consortium, a rate the defendants have said is higher than the agreed level.

“This dispute relates to disagreement over commitments made by the government to the consortium, not the government’s ability to impose taxes,” Exxon’s Spitler said.

“It is vital for all parties to honor the terms of a contract and abide by applicable law in order to achieve the desired long-term benefits envisioned when projects begin,” he said.

Chad became an oil producer in 2003 and produces around 120,000 barrels per day that it exports via pipeline through Cameroon.

Like many oil-dependent African nations, Chad has been hit hard by a drop in crude prices. Its economy is expected to contract by 1.1 percent this year, according to the International Monetary Fund.

Source: www.reuters.com