Petronas, which is part of a US-Malaysian oil consortium operating in Chad, said it will only respond to complaints linked to the agreement, if these come directly from the government there.

This was stated by media relations and information head Azman Ibrahim when asked to comment on charges that Petronas is among companies unfairly exploiting Chad's oil resources, under a US$3.8 billion project led by Exxon-Mobile.

AFP reported last Friday that the Chad presidency had complained the consortium had breached the terms of agreement by selling Chadian oil at knock-down prices.

Azman said oil production and the benefits from the joint operations will proceed as stipulated in an agreement reached in 1998 with the Chad government.

"Our relationship with the Chadian government is good, and we are in touch with the people there. We will not respond to statements until we get such communication directly from them," he said.

"We have conformed to whatever requirements are contained in the contract. But whatever disputes there may be, there are mechanisms within the agreement for further discussion."

Strain on resources

The statement issued by the office of Chad president Idriss Deby said consortium partners were selling Chadian oil at less that US$20 per barrel, when the global price is US$50.

"This practice puts considerable strain on the meagre resources Chad expects of its oil," it said.

An industry source in Malaysia said this may not be a deliberate move but one dictated by the market - the value of a barrel of Chad crude is much lower than its 'benchmark' counterparts such as Brent crude oil.

"Crude oil produced from Chad oilfields is classified as 'heavy' crude. It is highly acidic and yields very high percentage of 'heavy' products," said the analyst.

"Although prices of benchmark crudes such as WTI and Brent have increased by as much as 50 percent since the beginning of the year, Chad crude oil prices have not increased that much. No matter how high the price of Brent is, the price of Chad crude will not climb to that level."

He added that Chad crude oil will generally be about US$15 less than the selling price of such benchmark crudes as Brent crude oil.