Building of Sao Tome free zones to start early 2007
CONSTRUCTION of two free trade zones in Sao Tome and Principe, aimed at turning the West African islands into a regional oil industry support hub, is set to begin in first quarter 2007, a top official said yesterday.
Arzemiro dos Prazeres, chief executive of the Autoridade
Zona Franca (AZF), the government agency handling the zones, told Reuters the groups behind the projects would be handing in their final plans by the end of October for approval.
These would include details of roads, apartment and office blocks and time schedules for the work.
The main project is for a 165 million euro ($210 million) zone on Principe island being constructed by Geolog, formed by Portugal's Somague and the Swedish Gulf Agency Company.
A smaller 10 million euro ($13 million) facility on Sao Tome and an offshore business centre are to be built by Sociedade de Desenvolvimento de Sao Tome.
Dos Prazeres said he was confident the tiny state, which has become West Africa's latest oil exploration hotspot, had the ideal location and conditions to become a base for the oil and shipping industry in the Gulf of Guinea.
"Sao Tome and Principe has social peace. This is fundamental for the oil industry," he said.
"Look at all the problems faced by oil companies operating in Nigeria. They need a peaceful place where they can operate and we have already had companies expressing an interest, keen to register ships and platforms with us," he added.
The twin-island state is situated in the Gulf of Guinea, which along with Nigeria, Angola, Gabon and Equatorial Guinea already supply 16 per cent of the energy needs of the United States.
That figure is expected to rise to 25 per cent by 2015 as Washington tries to wean supply away from Middle East producers.
Sao Tome and Principe has attracted attention as a promising oil prospect since a series of major finds in the Gulf of Guinea in the last decade.
U.S. oil major Chevron said in May it had found oil and gas in its first exploration well in an offshore block shared by Sao Tome and nearby Nigeria, but said it was too early to tell if it was commercially viable.
Questions have been raised about the potential market for free trade zones in the archipelago but Dos Prazeres said the find had fuelled confidence in the project's viability.
"The projects were conceived in the logic that there was oil here and in the Gulf of Guinea region," he said.
"Now it's even better because we know there is oil in the (Nigeria/Sao Tome) Joint Development Zone (JDZ). This gives us even more confidence," he added.
Studies on the environmental impact of the projects had been carried out and small-scale farmers and fishermen who would be affected were being compensated by the government.
"Within one year of the start of construction, we will be ready to welcome our first clients," Dos Prazeres said.
"Within two years we believe we will be totally up and running and prepared to offer all kinds of services," he added.
Eager for business to start, the AZF was waiting for government approval of a project offering limited services to the oil industry in Sao Tome's northern Neves port.
"We don't want companies to have to wait," he said.
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