Nigeria and Sao Tome are expected to sign agreements Wednesday with oil companies to develop at least one more oil field in their joint offshore exploration area.
Senior officials of Nigeria and Sao Tome are hoping to wrap up agreements Wednesday with oil companies on at least one of two remaining offshore oil fields in their joint development zone.
At a ceremony Tuesday in Abuja, production sharing agreements for two deep water oil fields were endorsed by officials of the two countries and representatives of oil companies.
The offshore joint development zone shared by Nigeria and Sao Tome was established in 2001 and contains 23 exploration blocks and could potentially hold up to 14 billion barrels of oil reserves.
The Gulf of Guinea is seen as a hot spot for oil exploration in the coming years. Walter Bradhuber is chairman of ERHC, a U.S. company selected Tuesday to operate one of the blocks.
"After extensive period, a lot of work - we finally achieved, I think, a milestone and we are very happy about it. And I think it is a fantastic opportunity not only for the contractors but definitely for the countries," he said. "And it is, we believe it has tremendous prospects and the potential for benefiting the people of the countries of Sao Tome Tome and Principe and Nigeria. It's fantastic. It's been a long, uphill struggle but then again, I think its certainly worth it. We believe this is the future."
Jean Gandur of Canada-based oil company Addax says oil companies should look at ways of making a difference in the lives of the people.
"We must all of us understand that we are invited by these countries to operate their fields. This oil belongs to them,to start with," said Gandur. "We are here to help these people to get revenue, we have a responsibility, a human responsibility, a state responsibility. We are not here not only to make money, the national content, the social obligations is something in my mind every morning when I wake up."
By reaching a deal Tuesday, the two countries earned bonuses of $130 million. Nigeria will receive 60 percent of the revenues and Sao Tome will receive 40 percent.
The two blocks along with three others were awarded last May after delays prompted by disagreement between the countries and corruption allegations.
U.S. energy giant Chevron is drilling the first well on block one with Exxon Mobil as its partner.
Nigeria is Africa's top oil producer while the tiny twin island nation of Sao Tome and Principe is hoping to join the league of major oil producers.