Oil Resources Should Benefit All People
|May 19, 2005||Posted by Staff under Progress Report, The Progress Report|
Oil Resources Should Benefit All People
Sao Tome’s Oil Minister Quits, Burdened by Bribery Offers and Pressure from Oil Corporations
Here are portions of an article circulated by Transparency International from Reuters, May 2005.
by Silvia Aloisi
The top energy official of Sao Tome and Principe, a tiny African archipelago with the potential to be a major oil producer, quit on May 16 in a squabble over the awarding of offshore oil blocks. In an interview with Portuguese news agency Lusa, Minister of Natural Resources Arlindo Carvalho said he was resigning because it was not possible to work in a climate of allegations of irregularities in the oil negotiations.
He cited pressure over delays in releasing the results of a licensing round for five exploration blocks in a Joint Development Zone (JDZ), operated with Nigeria. The announcement, which was expected this week, has been postponed several times.
Senior ruling party officials on Tuesday accused President Fradique de Menezes and his aides of a lack of transparency and conflicts of interest in the awarding of the oil licences.
Corporations Exercise Pressure Behind the Scenes to Get Special Privileges
“We believe that private, personal interests are hindering the oil licence award process against the interest of our nation,” said a senior official from the MLSTP, one of two main parties in the ruling coalition.
Menezes on Friday (May 13) stepped down as chairman of Sao Tome and Principe’s National Petroleum Council but the MLSTP official, who declined to be named, said it was too little too late.
Carvalho’s resignation came 10 days after Menezes sacked his petroleum adviser. Both are from the Independent Democratic Action party, the other main member of the ruling coalition. Chris Melville, an analyst with Global Insight, said while he thought the row was politically motivated he did not think it would scupper the licence award.
“They’re under a lot of pressure to get on with it and it’s in nobody’s interest for the entire process to collapse.”
The archipelago is in the centre of the Gulf of Guinea off West Africa’s coast — one of the world’s exploration hotspots following several major oil finds over the last 10 years.
The Bush administration hopes to import a quarter of its oil from the Gulf of Guinea region in a decade, up from 14 percent now.
Sao Tome itself produces no oil, but geologists believe its offshore areas contain giant new fields.
Sao Tome and sub-Saharan Africa’s largest oil producer, Nigeria, agreed in 2000 to develop offshore blocks together with Nigeria taking 60 percent of revenues and Sao Tome 40 percent.
The Joint Development Authority (JDA) is in its second licensing round for five oil blocks. The first round was aborted after awarding only one exploration contract, for $123 million, to a consortium led by U.S. giant ChevronTexaco .
The second round went through the bidding stage in December, with offers as high as $175 million, but the winners have yet to be announced. No reason has been given for the delay.
On May 4, the JDA said it had forwarded its recommendations to the heads of state and that the results would be announced as soon as their endorsement was obtained.
A tiny and impoverished nation of 170,000 people, Sao Tome has been rocked by coup attempts and accusations of corruption as it prepares to become the latest African petro-state. Menezes survived a coup in 2003 by giving the military rights to oversee oil deals amid accusations of corruption.
In May last year, four ministers were reshuffled in a political row over shady oil deals — narrowly averting a full-blown government crisis.
Last June, Sao Tome sacked two senior JDA members and named 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.
Sao Tome & Principe Map and Fact Sheet
“Oil Curse” Stalks Africa’s Newest Petro-State
São Tomé Bracing for Oil Revenue Windfall
And these classics:
Lindy Davies on Oil Dividends for Nigeria
Alanna Hartzok on Citizen Dividends And Oil Resource Rents
Jeffery J. Smith on After Oil Peaks, Geonomics Wins the Next Wave
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