JDZ Nigeria-Sao Tome e Principe

[seek the light]

NDEBUMOG DELEGATION MEETING WITH NIGERIA-SAO TOME AND PRINCIPE JOINT DEVELOPMENT AUTHORITY, ABUJA-NIGERIA.


We have associate partnership with some government agencies, and a critical partnership with the Bureau of Public Procurement (BPP), Budget Office of the Federation (BOF), OSSAP-MDGs, among others. Our mission is to promote transparency and accountability in public resource management through pro-poor budgeting and anti-corruption campaigns for sustainable development in the Niger Delta and democratic consolidation in Nigeria.

As you may already know, Sao Tome and Principe Exclusive Economic Zone is a massive area that encompasses approximately 160,000 square kilometres. It is a frontier region that sits South of (our) Niger Delta, and West of Gabon salt basin, retaining similarities with each of those prolific hydrocarbon regions. Sao Tome and Principe are islands in a North-East to South-West trending chain of island extending offshore from Cameroon into Eastern Gulf of Guinea. Sao Tome and Principe are located in between prolific hydrocarbon regions, lying approximately 200 kilometres South of Nigeria and directly west of territorial waters of Equatorial Guinea and Gabon.
We are here for specific reasons, key among which is the inability of many civil society actors in Nigeria to know what exactly is happening in the zone. As it is, oil extraction in the zone is not covered by the NEITI Act or in the much anticipated PIB, with the zone being an autonomous entity within an enclave of Nigeria and STP. Since the era of former President Olusegun Obasanjo, up to the era of late President Umaru Musa Yar’Adua, our organisation has advocated and is still advocating for a creation of a Joint Nigeria-Sao Tome EITI Commission. It is our belief that such a commission would bring about disclosure on acreages, dividend, liabilities, DC, CO+ PO, CSR, among others to ordinary citizens of both countries. Information about happenings in the JDZ is not available for Nigerians. The yardstick used by your JDA at deciding your CSR, especially as it affects scholarship to Nigerians is not measurable by the civil society. Actuality of information about Block 2, 3, 4, among other issues concerning the PSC within the Zone is not also available. It therefore calls to question how ordinary Nigerians would be able to know what their stakes are, concerning the millions of US Dollars, which have been committed by our government for prospecting within the zone.

We are aware that in February 2007, Exxon Mobil exercised certain preferential rights to take 40percent of Block 1 at a cost of $49 million dollars based on the high Bid of Chevron’s $123 million dollars. However, the company declined to exercise its preferential rights to 25percent in the two other Blocks. Subsequently, in April 2004, Environmental Remediation Holding Corporation (“ERHC”) exercised its preferential right to take 30percent of Block 2, 20percent of Block 3, 25percent of Block 4 and 15percent of Block 6, from all, which unlike Exxon Mobil, were exempted from paying signature bonuses. ERHC also decided to take 15percent and 20percent stakes in Blocks 5 and 9 for which signature bonuses were payable. Block 1 was awarded to Chevron with 51percent, Exxon Mobil 40percent, and Equity Energy Resources 9percent. The signature bonus of $123 million dollars was expected to yield Sao Tome and Principe, $49 million dollars being a roughly estimated eighty percent of Sao Tome and Principe’s GDP.

The First Bidding Round was declared officially closed with only the Block I award. Officials announced that they were not satisfied with the bids tendered for the remaining Blocks and that a second Licensing Round for Block 2,3,4 and 6 would be organized in the near future. JDA officials also said additional testing would be conducted on 5, 7, 8 and 9 before those Blocks would again be put on auction. After lengthy negotiations, the parties finally signed the Production Sharing Contract (PSC) for Block 1 on the 2nd of February, 2005. However, till date, a copy of the PSC has not been made available to the public. NDEBUMOG does not know if the Nigerian Extractive Industries Initiative (NEITI) has accessed it either.
More interesting, is the subject matter of how much really is Sao Tome indebted to Nigeria? This is because, in 2009 another $10 million USD was given to STP as loan, upon the fact Nigerians are not aware if the earlier millions of dollars loaned to STP by the government of former President Olusegun Obasanjo has been paid back. We are therefore eager to know if that particular sum was paid back and how much is the exact aggregated figure owed Nigeria by STP due to associated oil exploration activities in the zone? The answer should be within the shelves in your office here, hence we are here, and we are hopeful that we will find the answer here. Inability to know this further makes it difficult for all Nigerians to know when exactly dividends from oil exploration within the zone would start yielding dividend. We also want to know which account of government would host such payment. Is it going directly to the CRA or to a Dedicated account with CBN? Or a Joint account by both countries?

While thanking you for this audience granted our delegation, we want to request that the JDA should also set up a Civil Society Desk towards marrying the interest of the larger civil society within your organogram, that is, to make it easy to reach your office just by a telephone call for information, as it is done by BPP, EFCC and NEITI. It would also be appreciated if JDA can choose to so brief Nigerian Civil Society quarterly or twice a year about happenings within the zone.

Thank you for your attention.

George-Hill Anthony
Executive Director-Niger Delta Budget Monitoring Group/Leader of delegation
Dated 7th April, 2011


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