Sao Tome Oil Commission To Get Government's Side

The Sao Tome parliamentary commission that is studying the report by R. Dobie Langenkamp and Procurador-General Arlindo Pereira is asking the "government" of Sao Tome - i.e., the minority party headed by President Fradique de Menezes, not the MLSTP that is the "government" in parliamentary terms - to provide testimony about the proposed Production Sharing Contracts and the May 31 awards of Blocks 2 through 5, the Portuguese news agency Lusa reported today.

Here is the Lusa report:

Sao Tome: Parliamentary oil commission wants gov't view of oil award probe

Sao Tome, Dec. 19 (Lusa) - The head of Sao Tome and Principe's parliamentary oil commission, which is studying an official report on alleged wrongdoing in the awarding of oil licenses, said Monday that he wants to hear the government's reaction to the official probe.

Carlos Neves, speaking after a session of parliament`s oil commission, told reporters: "We want to know the position of the government on the report and also in relation to the production sharing accords for the blocks".

The specialized parliamentary body began analyzing a report last week on purported irregularities in the awarding of five offshore blocks in the archipelago's Joint Development Zone (JDZ) operated with Nigeria.

After receiving the report from the Attorney General`s office, Neves, who serves as the 55-seat legislature's deputy speaker said his commission would analyze the report with "great precision".

The Reuters news agency reported last week that the official report, prepared over two months at the request of the oil commission, had uncovered strong evidence of "serious failures" in the May 31 awarding of the JDZ blocks.

The US-registered but Nigerian-controlled ERHC oil firm was also reportedly fingered as having possibly made irregular payments or provided other benefits to Sao Tomean officials ahead of the awards, whose yet-to-be-paid signature bonuses amount to some USD 400 million to be split 60:40 in Nigeria's favor.

ERHC was awarded control of two of the five blocks, in partnership with other companies, including US mid-tier Pioneer, and gained significant interests in the other three blocks.

Production sharing contracts to operate these blocks were due to have been inked last week by Sao Tome, Nigeria and the energy companies involved.

The Attorney General's office will "refer the matter to the US Department of Justice and Security and Exchange Commission to seek their assistance in investigating whether violations of American law have occurred," according to Reuters.

When the investigation into possible wrongdoings in oil contract awards was launched in Sao Tome, the country's attorney general said he would seek cooperation from Nigeria in the process.

Abuja's authorities, however, did not cooperate in the investigation and Nigeria's top oil official said last week that the call by Sao Tome for a US corruption investigation could jeopardize the bilateral treaty that set up the JDZ in disputed Gulf of Guinea waters.

RCN/SAS/CJB.

Lusa