Foreign companies including ExxonMobil, ChevronTexaco and Petronas were encouraged by the World Bank to invest in the 1070-kilometre pipeline, which runs though neighbouring Cameroon.

The World Bank has blamed the withdrawal on Chad’s failure to honour the 2001 agreement that significant oil income would be spent on boosting the economy.

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Disagreements on how the annual $1.4bn revenue from Chad’s 170,000 barrels of oil a day should be spent arose shortly after production began in 2003, when president Idriss Déby challenged the terms of the initial World Bank financing agreement.