The government of Sao Tome and Principe has decided to terminate the contract with oil company Sinoangol for “breach and violation” of the production sharing contract in Block 2 of the maritime area of the archipelago, the director of the National Petroleum Agency (ANP) said on Wednesday.
In a statement, director Orlando Pontes said “among multiple defaults and violations, Sinoangol never provided the Sao Tome state with information about the amount received from the transfer of 30% stake in block 2 which took place on 31 March 2014.”
In addition to “systematic and continuous” violation of laws on oil tax and revenues, the statement said that the company “never even allowed the calculation and payment to Sao Tome of state tax as a result of this transfer.”
In addition to the payment of US$5 million for the production sharing contract signing bonus, the oil company was also required to provide US$250,000 per year to fund social projects in the archipelago.
The oil company announced investments of more than US$154 million in oil exploration, which included seismic and environmental impact studies as well as drilling and evaluation of the existence of deposits of commercial value.
Sinoangol is a partnership between the China Petroleum & Chemical Corporation (Sinopec) and Angolan state oil company Sonangol. (macauhub)