Obasanjo, Menezes sign pact to publish joint oil accounts

Nigeria, Africa's leading oil producer, and its newly oil-rich neighbour Sao Tome and Principe, on Sunday signed a joint declaration regarding transparency and governance in the Joint Development Zone shared by the two countries. The President of Nigeria, Olusegun Obasanjo, and visiting President of Sao Tome and Principe, Fradique De Menezes, agreed at a meeting in the Nigerian capital, Abuja, to full public disclosure of all transactions in respect of oil companies’ activities in the zone, which spans the two countries' waters in the Gulf of Guinea. The Joint Development Authority (JDA) was also required to make public the basis for all awards of interest in the Joint Development Zone, including the technical and due diligence analysis supporting such awards. “All bids and supporting data, other than geological or similar proprietary data, shall be made public. Any failure to comply with these requirements...shall make such contract or agreement voidable," the declaration said. Both leaders said the pact was "a unique model for cooperation by two African countries working together for oil development with transparency," and that their accord was line with the Extractive Industries Transparency Initiative. Launched in 2002 at the World Summit on Sustainable Development in Johannesburg, the initiative is backed by the world’s richest countries and international campaigners for accountability by multinationals engaged in the mining and oil industries. The Nigeria-Sao Tome and Principe Joint Development Zone is the seventh such arrangement in the world and Africa's second to be brought under the initiative. It is seen as one of the best diplomatic approaches towards the resolution of boundary issues as it ensures mutual development and guarantees security of the affected area for 45 years. The initiative insists that companies and governments must publish what they pay in order to check the corruption and mismanagement that has left citizens of many resource-rich countries poor despite their countries earning hefty incomes from the export of crude oil and other minerals. Nigeria is often mentioned as an example of a country that has grown poor from its rich resources. More than 70 percent of its population of more than 126 million people live below the poverty line despite the hundreds of billions of dollars' worth of crude oil exported over the last 40 years. The prospect of oil wealth has already fuelled instability in tiny island nation of Sao Tome and Principe, which lies 240 kilometres (150 miles) off the West African coast and is one of the poorest in the world. Menezes was briefly toppled by dissident army troops anxious to have a say on the distribution of oil wealth, while on a trip to Nigeria last July. He was restored to power after the dissidents gave way to pressure from Nigeria and other African countries. According to the president, his administration had to embark on a public enlightenment campaign to educate the people on how the licensing rounds work and how much could be expected from the oil deals. Under the agreement for the joint exploitation in the oil zone, signed in 2002, Nigeria will receive 60 percent of the revenues while 40 percent will go to Sao Tome and Principe. The first of nine oil fields put on auction last October was sold to ChevronTexaco and ExxonMobil in April. The oil giants paid a signature bonus of US $123 million for it.