Despite an unusually heavy rainy season, preparations were completed this quarter for two major upcoming Project milestones.

- In Cameroon, the first pipe for the underground crude oil transportation pipeline will be installed in November.

- In Chad, two specially-made oil well drilling rigs arrived for field trials, clearing the way for the first production well drilling early in the new year.

In the oilfield area of southern Chad:

- Construction began on the oil processing facilities.

- Final locations have been chosen for the first 74 oil well pads and nine pads have been completed.

Along the pipeline right of way in Cameroon:

-About 160 kilometers of the right of way has been cleared of trees by crews working in advance of pipeline construction teams.

- Nearly 700 kilometers of pipe has been manufactured out of the 1,070 kilometers that will be needed.

- Almost one-third of the required pipe has been transported from the factories in Europe to the Project's storage yards in Cameroon.

First steps have been taken towards the building of the marine terminal to be located near Kribi, Cameroon.

- The tanker that will be reconditioned and refitted to serve as the Floating Storage and Offloading vessel, or FSO, has been selected.

- A scale model of the marine terminal has been tested to ensure that its design will function well in the wave and wind conditions it will encounter.

Work on the road upgrades continued despite rainy season conditions.

- In Cameroon, the contractor moved construction activities to higher elevations that were less likely to be flooded.

- At the M'béré River, pouring began on the concrete road surface (deck) of the bridge.

The total number of non-compliance situations remained about the same this quarter at 96, despite intensified construction activities.

- There have been no Level III non-compliance situations since the Project began.

- The number of Level II non-compliance situation reports increased to twelve this quarter.

The Project experienced its most significant spill to date when a diesel fuel tanker truck overturned on a rain-flooded road in southern Chad.

- Response and cleanup was rapid but some spilled fuel made its way into a nearby stream feeding the nearby Nya and Logone Rivers.

- The Project quickly informed local inhabitants about the spill and put safeguards in place to protect the users of the affected waterways.

- Most of the light fuel evaporated or was collected at the scene using absorbent booms and pads, but some light sheen was spotted on the two rivers.

- The Project has enhanced its Construction Phase Spill Response Plans based on lessons learned from the spill and additional training will be provided to spill response team members. More equipment is also being added to the strategically located spill response caches set up in Chad and Cameroon.

The worker on-the-job safety record continues to be in the range that would be expected for similar industrial projects in Europe or North America.

- The Recordable Incident Rate (RIR) is 0.49 per 200,000 hours worked. The Lost Time Incident Rate (LTIR) is 0.05 per 200,000 hours worked.

- These records have been achieved even though the hours worked per quarter have increased more than 250% since the first of the year.

Traffic safety remains a challenge for the Project and a radar speed gun survey has identified high priority areas for safety improvement. Speed bumps and other measures are being implemented in targeted areas.

Progress has been made towards implementation of the Project's community and regional compensation programs.

- In Cameroon, requests for proposals went out asking NGOs to provide facilitators to help villages and districts select their projects as part of the regional and community compensation programs.

- In Chad, a development organisation associated with the German government has been selected to facilitate the community compensation program.

Project employment has now exceeded the 7,000 person level originally predicted for the construction phase.

- Worker wages flowing into the economies of Chad and Cameroon exceeded 2.6 billion CFA (over $4 million) for the quarter.

- Chadians and Cameroonians hold 90% of the Project jobs. About 40% of these national workers hold skilled jobs and 7% work in supervisory positions.

Local business spending by the Project reached a new peak this quarter of 31.6 billion CFA ($48.6 million).

Over 1,600 people received craft or high skills training this quarter, in addition to over 2,600 people who received SHE and orientation training.

Training for long term operations-phase employees continues.

- In Chad, the first students completed initial studies at the long term employee training center and have been sent overseas for high level technical training.

- In Cameroon, a new long term training center has started up at the University Institute of Technology of Ngaoundere and the first students started classes.

The three most common disease issues for Project workers remained stable or dropped this quarter. Malaria and sexually transmitted disease rates held steady. The food- and water-borne disease rate improved dramatically.

The Roll Back Malaria program plan has been finalized in Cameroon. As part of the Roll Back Malaria program in Chad, anti-mosquito bed nets have been ordered and arrangements finalized with the NGOs who will help distribute them and train people in their use. Roll Back Malaria is a partnership program with the World Health Organization.

Only one more step remains before the Environmental Foundation can officially begin fulfilling its mission.

- COTCO has deposited its $3.5 million contribution into the Environmental Foundation's escrow account, thus funding the endowment.

- The Cameroon Ministry of Foreign Relations recognized the Foundation as a foreign organization in Cameroon.

- The next and final step will be the granting of Public Utility (non-profit) status to the Foundation by the Republic of Cameroon.

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