Nigeria has threatened to pull out of the oil prospecting agreement with São Tomé and Principe as the expected $100 million annual revenue from the venture has become an illusion.
The Joint Development Zone (JDZ) Treaty between the Federal Government of Nigerian and Democratic Republic of São-Tomé and Principe which was signed in Abuja on 21 February 2001, saw the two countries establishing a Joint Development Authority (JDA) with headquarters in Abuja.
The Nigeria – São Tomé and Príncipe Joint Development Authority allows a joint prospecting for petroleum and other resources along the Nigeria – São Tomé and Príncipe maritime border, with Nigeria owning 60 percent equity and São Tomé and Principe 40 percent.
But the Minister of State for Foreign Affairs, Dr. Nuruddeen Mohammed while appearing before the Hon. Abubakar Momoh- headed House of Representatives Committee on Cooperation and Integration in Africa, described the venture as “Frustrating.”
He said the estimated $100m annual income from São Tomé and Principe Joint Venture was not forthcoming. “Frustration is setting in,” Mohammed told the lawmakers at the National Assembly.
According to him, the venture which was established under optimist oil prospecting projections, has proved to be a drainpipe on the country as Nigeria has been paying the bills of the venture alone for the past five years, with no visible returns.
According to the Minister, for almost five years, Nigeria has been single- handedly paying the bills of the authority, adding that the project had continued for this long because São Tomé and Principe “is a small country of about 170,000 people, so they are more desperate for oil.”
He revealed that: “The prospect of oil is very little if any, we should look again at the treaty. Question is: were we too optimistic by setting up the JDA, should it be scrapped?” He asked rhetorically.
He said due to the dwindling prospects of oil in the zone, Sao Tome and Principe has decided convert the JDA activities from oil prospecting to fishing.
“Should Nigeria convert its oil mining licences to fishing licences? São Tomé has agreed in principle but Nigerian is yet to respond,” he said.
While answering questions from the committee, Mohammed revealed that some of the challenges besetting the venture include Boundary issues, with Niger, Benin, Cameroon, as well as Issue of bilateral military function, piracy, Illegal fishing and poaching.
He said because of the security challenges in the zone, “We have said we must come together to have a joint military function to protect ourselves.
The Committee had earlier questioned the none remission of revenue from the joint Development Authority to the federation account.
The Chairman of the Committee, Abubakar Momoh said that since Nigeria has 60 percent of the venture, “we need to know what is going on.”
He said Nigeria cannot continue for fund a venture that is of no economic benefit. “The establishment was set up by protocol, if it’s not viable we can pull out.”
The lawmaker said since the Ministry of Integration and Cooperation in Africa is now subsumed under the Ministry of Foreign Affairs should furnish the committee with reports on the revenue situation from the Joint Development Authority.
The committee members however flayed the attitude of the two Nigerian Executive Directors in the JDA saying they are hardly available when called as they were busy globetrotting. “If you call them, they will say they are in America. I wonder if that is how they run businesses” the Chairman said.