afrol News, 16 January - Fradique de Menezes, President of Sao Tomé and Principe, is visiting his Nigerian colleague, Olusegun Obasanjo, to launch the Joint High Authority to manage offshore oil exploration in a "joint development area" in the Gulf of Guinea.
In March last year, the two countries had reached an agreement on cooperating on the exploitation of the oil riches in a joint development area off the islands of Sao Tomé and Principe. According to the bilateral treaties of 2001, Sao Tomé will obtain 40 percent of the revenues from the oil exploitation, while the rest goes to Nigeria (already Africa's largest oil producer). A Joint High Authority was to be set up. This also ended the dispute over sea borders, although they remain undefined.
Menezes and Obasanjo today inaugurated the Joint High Authority in Abuja, the Nigerian capital. Nigeria, which is to receive slightly more of the revenues than Sao Tomé, had contributed with human and capital resources for the establishment of the body.
Nigeria has, in contrary to Sao Tomé, decades of experience with oil production and management, and thus is to share its competence with the smaller partner, according to the treaties. Nigeria thus is to build deep-water port in Sao Tomé, construct an oil refinery and well as provide 250 scholarships for Sao Toméan personnel.
Sao Tomé earlier had led negotiations with different international oil companies interested in exploiting the zone, but cancelled these negotiations in favour of an agreement with Nigeria. As there does not exist a bilateral agreement of the exact delimitation of the maritime borders between the two countries, Nigeria and Sao Tomé decided on exploiting this limited part of the Gulf of Guinea jointly.
The entire inner part of the Gulf of Guinea remains an area of dispute, as Nigeria, Cameroon, Equatorial Guinea, Gabon and Sao Tomé make claims to possible oil rich maritime territories using different methods of delimiting. Several reserves that were identified 10 years ago thus remain unexploited. Processes to solve the disputes, including arbitration in The Hague and definitions of joint development areas, have however been launched.
Production off Sao Tomé has not yet started, but there have been found commercially exploitable oil resources close to the islands. Exxon Mobil is expected to start drilling in the "joint development area" within short. Operations to drill oil in 2,500 meter deep Sao Toméan water are scheduled for 2004.
The Sao Toméan government thus is optimistic that significant petroleum discoveries are forthcoming in its territorial waters in the generally oil-rich waters of the Gulf of Guinea. Oil exploitation off the island state could prove highly lucrative for the small Sao Toméan population of 145,000.