News24

Promise of oil sparks fights

2005-05-30 15:59

Sao Tome - The tiny West African island state of Sao Tome and Principe is beginning to tear itself apart ahead of a promised oil boom that could transform one of the poorest countries in the world.

Giant neighbour Nigeria has expressed concern over a delay in awarding five oil exploration contracts in the offshore development zone it has created on a 60-40 basis with the twin island archipelago in the Gulf of Guinea.

Only one block has so far been attributed, in February, when it was awarded to United States (US) oil companies ChevronTexaco and Exxon-Mobil, plus the Nigerian-Norwegian group Equity Energy Resources (EER).

It enabled Sao Tome's parliament to approve the largest budget in the country's history, totalling $96.2m and including oil revenue, of $49.2m, for the first time.

Strike until demands are met

Fired up by the prospect, state employees began a week-long strike on Monday, closing ministries, hospitals and other services and virtually every school in support of a pay rise after talks with the government broke down.

They are seeking an increase in the minimum monthly salary from $30 to $100, while the government has offered $40.

But the government says $8m of the windfall are going on priority projects including health and education, with the rest being needed for debt repayments.

On the political front, already poor relations between the main component in the ruling coalition, the Sao Tome and Principe Liberation Movement-Social Democrat Party (MLSTP-PSD), and President Fradique de Menezes, have worsened.

Menezes in the hot seat

Head of the MLSTP-PSD-dominated parliament's oil commission, Carlos Neves, claimed certain oil companies had been favoured and attacked the alleged role of some presidential aids, notably Menezes' chief of staff who was accused of links to one company in particular.

Menezes yielded, sidelining the official from oil negotiations, but then found himself under attack for his own handling of the oil issue.

MLSTP-PSD spokesperson Carlos Tiny, demanding a judicial inquiry into the criteria for awarding blocks.

"Some companies were ruled out at the technical stage but are still being given a share."

Menezes retorted problems had emerged because of agreements signed before he became president in 2001, but the row grew more bitter when he sacked his oil adviser, Patrice Trovoada, head of a smaller party in the ruling coalition.

Natural resources minister Arlindo Carvalho, a member of Trovoada's party, responded by handing in his resignation, which the president refused, on the grounds that negotiations over attributing further exploration blocks were in full swing.

Last week Nigeria's deputy foreign minister Abubakar Tanko told a meeting of the neighbours' joint ministerial council "nothing has been achieved due to undue politicisation of what should be a purely technical matter".