Sao Tome/Nigeria fail to award oil blocks again
Thu May 26, 2005 05:46 PM ET
By Felix Onuah
ABUJA, May 26 (Reuters) - Sao Tome and Nigeria failed again on Thursday to award oil exploration licences after a two-day meeting that sought to end five months of delays plagued by discord and corruption allegations.
A communique issued after the ministerial meeting in the Nigerian capital said the two parties had come to a "harmonised position on all the blocks," but added that this was "subject to the endorsement of the heads of state."
At the previous ministerial meeting in April, the two sides also said they had forwarded recommendations to the heads of state for endorsement.
The offshore blocks are in deep water in the Gulf of Guinea, one of the world's exploration hotspots since a series of huge oil discoveries over the last decade.
Sao Tome, a tiny and impoverished nation of 170,000 people, has been rocked by coup attempts and accusations of corruption as it prepares to become the latest African petro-state. Minister of Natural Resources Arlindo Carvalho tendered his resignation last week, saying it was not possible to work in a climate of allegations of irregularities in the oil talks.
But his resignation was not accepted by President Fradique de Menezes, who sacked his petroleum adviser over the delays earlier in the month.
The two countries are engaged in their second licensing round for five oil blocks. The first round was aborted after just one exploration contract was awarded, for $123 million, to a consortium led by U.S. giant ChevronTexaco (CVX.N: Quote, Profile, Research) .
The second round went through the bidding stage in December, receiving bids as high as $175 million, but officials have been squabbling over which companies should have how much of each block.
QUESTIONS
Nigeria said at the start of the latest meeting that the prolonged delay was calling into question the integrity of the licensing and the partnership of the two countries.
"If we continue to allow extraneous factors to guide our thoughts and decisions it will seriously affect the bond of partnership," junior minister of foreign affairs, Abubakar Tanko told reporters on Tuesday.
In a treaty signed in 2000, the neighbors agreed to jointly administer the formerly disputed offshore area.
Nigeria is the world's eighth largest exporter. Sao Tome produces no oil, but geologists believe its offshore areas could contain giant new fields.
The United States hopes to import a quarter of its oil from the Gulf of Guinea region in a decade, up from 14 percent now.
Some political forces in Sao Tome are not happy that a little-known U.S.-based company ERHC Energy (ERHE.OB: Quote, Profile, Research) has obtained preferential stakes in many of the blocks on offer.
President Menezes survived a military coup in 2003 by giving the military rights to oversee oil deals. Last year, four ministers were reshuffled in a political row over allegedly shady oil deals.
Last June, Sao Tome sacked two senior members of the joint development authority for unspecified reasons and nominated one of its citizens to replace a Nigerian at the head of the body. The authority released a statement in the same month saying bribery of licensing officials would not be tolerated.
