Subsidiary of Chinese group Sinopec plans to prospect for oil in Sao Tome and Principe

10 October 2013

Sinoangol, a subsidiary of the China Petroleum & Chemical Corporation (Sinopec), plans to invest US$154 million in oil prospecting in an offshore block in Sao Tome and Principe, the director of the Sao Tome and Principe National Oil Agency (AP) said Wednesday.

In a statement, Fernando Maquengo said that the National Oil Agency, representing the Sao Tome and Principe government, had signed a contract to share production from block 2 of the Exclusive Economic Zone (EEZ) with Sinoangol.

Citing the fundamental basis of the contract, Maquengo announced “an investment of US$154 million in the first eight years, to carry out seismic surveys and environmental impact studies, test drilling and assessment.

As well as a US$5 million bonus due to be paid with 30 days to the Sao Tome oil account,” Sinoangol will also have to spend a further US$5 million every year on social projects as well as US$250,000 a year on training Sao Tome and Principe staff, noted Maquengo.

After eight years of research, the contract stipulates there will be a second period of 20 years for development and production, the ANP statement said.

Sinoangol’s interest in block 2 was announced in April 2013 in a request for direct negotiation “in exceptional cases” as part of the Sao Tome and Principe framework law on oil operations.

As well as its exclusive area, Sao Tome and Principe also has a joint exploration area with Nigeria based on a treaty signed in February 2001, stating that Nigeria receives 60 percent of revenues while 40 percent goes to Sao Tome. (macauhub)

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