08 December 2016, Sao Tome — Sao Tome and Principe has decided to terminate an oil concession granted to Sinoangol, a joint venture between China’s and Angola’s state-owned petroleum companies for “breach and violation” of their contract, the National Petroleum Agency (ANP) said on Wednesday.
“Among several breaches and violations, Sinoangol never provided the Sao Tomean state with information regarding the amount received from the transfer of 30 percent of participatory interest in block 2 that occurred on March 31, 2014,” ANP director Orlando Pontes said in a statement.
Sinoangol paid $100,000 to Sao Tome and Principe’s National Oil Account in 2014 as a transfer fee on the cession of 30 percent of its holding in block 2 to Sonangol, according to a report on the Extractive Industries Transparency Initiative’s website.
Neither Angola’s Sonangol nor China’s Sinopec could immediately be reached for comment.
Sao Tome, a tiny former Portuguese colony in Africa’s Gulf of Guinea, is surrounded by oil-rich neighbours but has failed to find oil after several years of prospecting.
However, several firms are looking for crude in blocks the industry sees as likely to yield it eventually.
Sinoangol acquired the block in 2013 and promised to invest $154 million to develop it. Pontes said tax owed to the state from a transfer of its stake was never paid.
Other companies operating in the island nation include Equator Exploration Ltd on blocks 5 and 12, and Houston-based ERHC Energy Inc in block 11.
*Ricardo Neto; Tim Cocks; Editing: Adrian Croft – Reuters