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Wednesday, January 21, 2009
Nigeria, Sao Tome worry over oil exploration delay in JDZ
By Sulaimon Salau with agency report

PRESIDENT Umar Yar'Adua and his counterpart from Sao Tome and Principe, Fradique de Menezes have registered their displeasure about the delay in oil explorations from the Joint Development Zone (JDZ).

The duo said that they would put pressure on oil firms to forge ahead with exploration in the zone jointly operated by both countries.

They said that licensing agreements were in place for four of six blocks in the zone but that there were still some unresolved issues over rights to the two remaining blocks.

Yar'Adua said: "It is time for us now to make the oil companies work in that zone between our two countries. Nigeria is going to put pressure on them to start drilling activities on the oil blocks they won and for which agreements have been signed."

Exploration in the area has so far proved disappointing. Chevron has said that an early oil strike did not prove commercially viable, but it continued drilling.

Speaking in the same vein, de Menezes said: "We agreed that this is the time to make the oil companies in the zone work. The oil companies must now start work. The Nigerian president has assured me that Nigeria is now ready to mount some pressure on the oil companies in order to really start operating the oil blocks, because they must drill the blocks they won."

He, however, lamented that Chevron that won block one had stopped drilling from the zone since about two years ago.

"We, Sao Tome and Principe, have no means like Nigeria to make the big companies fulfill the obligations they signed ... but Nigeria has, because those companies also operate in Nigeria's economic zone," de Menezes said.

China's Sinopec and Switzerland's Addax Petroleum are also operators in the zone

According to the agreement, 60 per cent of any government revenues from the zone will go to the Nigerian government, while Sao Tome will receive the remainder.

Meanwhile, the World Bank and the Federal Government of Nigeria over the weekend granted the government of Sao Tome and Principe a donation of $110,000 to set up a consultation committee for management and transparency of oil activities.

According to de Menezes, the Nigerian quota of the approved loan was $30 million (N4 billion) targeted at covering up the state budget expenses.

President de Menezes said that Nigeria would hand over between 30,000 and 50,000 barrels of oil per day to the archipelago as of February, under the terms of an agreement reached with his Nigerian counterpart.

Negotiations between de Menezes and Umaru Musa Yar'Adua took place during a visit by the Sao Tome president to Abuja, accompanied by the ministers for Natural Resources and Energy, Cristina Dias and of Planning and Finance, �ngela Viegas.

Already, a mission from the bank is currently in Sao Tome to discuss strategies to discuss strategies for supporting the archipelago with the Sao Tome government.

Discussion of support for the 2009 General State Budget, funding of an Education programme and financial support from the World Bank and the International Monetary Fund (IMF) for the environment and airport facilities are on the agenda.

http://www.ngrguardiannews.com/energy/article05//indexn3_html?pdate=210109&ptitle=Nigeria,%20Sao%20Tome%20worry%20over%20oil%20exploration%20delay%20in%20JDZ&cpdate=230109