An Overview of Hydrocarbon Potential in São Tomé e Príncipe

1. An Overview of Hydrocarbon Potential in São Tomé e Príncipe Luís Prazeres Executive Director National Petroleum Agency (ANP-STP) This presentation was presented by Mr. Luis Prazeres at the '8 th Conference West Africa Oil and Gas' on 21-22, June, 2005, in London. JuriSTEP thanks Mr. Luis Prazeres for having kindly and dully authorized us to release this document. For any further information on this issue, please contact Mr. Luis Prazeres by phone to 00 239 22 904868 or by e-mail: luis_prazeres@yahoo.com.

2. Sao Tome e Principe • S. Tomé e Príncipe is an archipelagomade up by two islands and many islets situated in Gulf of Guinea,West Africa and is between latitude 1º45’ north 0º25’ south and longitude 6º26’ east 7º30’ west. • Distance from Continent is 300kms. • Total Area: 1001 Km2 • Population: 160 000 • Capital: São Tomé City ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

3. Historical Perspective • 1856- first presence of hydrocarbons in São Tomé e Principe(STP) was acknowleged by the existence of oil seeps onshore in Uba Budo, Pinheira and Morro Peixe. In the same year an american high rank officer wrote a letter to the Governor of the archipelago requesting permission to evaluate the oil potential of the islands. The portuguese colonial administration refused to grant the permission • 1928 -The portuguese colonial governor, Mr. Sebastião José Barbosa passed a law by decree banning all exploration activities in the islands ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

4. 1972- Special authorization was granted to Texas Pacific to drill two wells next to surface oil seeps(Uba Budo and Pinheira) • 1974- Portuguese colonial administration was about to sign a concession agreement with anglo-american company, Ball&Collins for the exploration and exploitation of oil. Due to independance in 1975,July 12th, the agreement was never signed • 1980- Soon after the independance the new STP authorities resumed contacts with Ball&Collins and then with Premiere Consolidate without significant results ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

5. 1980/89- STP Government contacted several countries, namely: Norway, Brazil, Portugal and Angola requesting help to finance seismic surveys; Although some assistance was obtained, no significant progress was made • 1989-Five year concession agreement was signed with Island Oil Corporation.The company drilled two wells onshore in vicinity of oil seeps(Pinheira and Morro Peixe. Soon after, the operations were abandoned. The agreement expired in 1995 • 1997- May 27th, STP signs the first MOU with ERHC/PPC • 1998- April, STP files EEZ claim with the United Nations based on median line principle as stated in the United Nations Convention on Law Sea. • 1998- Sep 10th, STP signs a Technical Assistance Agreement(TAA) with Mobil(later ExxonMobiL) ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

6. 1999- Feb.7th, Schumberger starts 2D seismic acquisition in 22 blocks for STP EEZ • 1999- Dec. 19th, beginning of negotiations between STP and Nigeria on boundary delimitation • 2000- Aug.30th, As the ministerial and technical teams of both countries could not reach agreement on boundary delimitation,the two Heads of States signed a Joint Political Communique towards the establishment of a JDZ • 2001- Feb. 12th, STP signs agreement with PGS-Exploration • 2001- Feb. 21st, STP and Nigeria sign the Treaty that establishes JDZ and JDA ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

7. 2001/2 – PGS carries out 3600km of 2D seismic in the STP EEZ. • 2002 – PGS carries out 3000km2 of 3D in the north-westwern of the JDZ • 2002 – Jan.16th, Joint Development Authority established under the Treaty begins operations with inauguration of four executive directors • 2003 – April 22nd, First licensing round in the JDZ was offically announced • 2004 – November 15th, Second licensing round takes place • 2005 – February 1st, signature of first PSC on JDZ (block one) ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

8. The Three Provinces of Resource Management in STP • We consider three provinces, namely JDZ, EEZ and ONSHORE STP • JDZ – which is a joint administration with Federal Republic of Nigeria • EEZ – which is exclusively under the jurisdiction of the STP government. The petroleum prospective of this province is still an open question but there are encouraging signs for future commercial discoveries in the EEZ • Intensive drilling in deep water areas around the EEZ and several 2D seismic surveys conducted since 1999 have thrown some light on the possibilities for finding hydrocarbon in the zone • Some Majors and Independents have strongly shown interests on the future developments of the zone ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

9. ONSHORE STP – In addtion to the offshore sectors, there is also the possibility of exploration onshore the islands within STP • Historically there has been some interest in drilling to test signs provided by oil seepage onshore • In fact, one well that was drilled years ago in SaoTome island,has encountered hydrocarbon shows in sands, that according to scientists have been elevated from deep sea floor by the volcanic rock that dominate the islands • There is therefore current interest in drilling onshore as part of the exploration and promotion of the EEZ ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

10. (JDZ / EEZ STP) MAP ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

11. The Political and Regulatory Bodies for Oil Sector Management Organizing the petroleum administration, the govenment created in June 2004 the National Petroleum Council(CNP) and National Petroleum Agency(ANP-STP) National Petroleum Council – is a political body with the task of defining the national policies for the rational and good use of various energy sources CNP is made up of fifteen members, namely President of Republic(Chairman), Prime Minister,Ministers in charge of oilsector,foreign affairs,defence,finance and fisheries. Others members are President of Autonomous Region of Principe island,representatives of Trade Union,Civil Society and Executive Director of ANP-STP as Secretary, ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

12. National Petroleum Agency( ANP-STP) – is a petroleum regulatory body with folowing administrative and legal capacity: • Participate in the proposal of legislation and its implementation • Propose and apply the regulations • Promote the exploration within EEZ • Organize and conduct licensing including negotiations with applicants • Monitor the petroleum operations to ensure adherence to legislation, regulations and contractual terms • Assess and recommend the aproval of field development plans, tail-end production and abandonment • Co-ordinate all government supervisory functions related to petroleum operations ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

13. Extractive Industries Transparency Initiative • São Tomé e Principe has fully committed to EITI principles • Declaration of Abuja signed by Presidents of Nigeria and São Tomé e Principe on 26th June 2004, leading to inclusion of transparency clause into PSC signed recently between JDA and Chevron-Texaco/ExxonMobil/EER for block one • Petroleum Revenue Management Law approved by National Assembly in November 15th 2004 and promulgated by the President on December 29th 2004. The objective is to ensure that revenue from petroleum activities is used to create lasting benefit to the nation and is citizens • Participation of STP on the EITI London Conference,17th March by Executive Director of National Petroleum Agency ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe

14. THE END Fim Thank You Very Much Muito Obrigado ANP-STP / Agência Nacional do Petróleo de São Tomé e Príncipe