Nigeria and São Tomé & Príncipe have stepped up efforts to attract fresh investment into their long-idle offshore oil acreage, more than 20 years after early discoveries failed to reach commercial production.
The Nigeria–São Tomé & Príncipe Joint Development Authority (JDA) is calling on investors – particularly Nigerian independent oil firms to resume exploration activities in the ultra-deepwater Nigeria–São Tomé & Príncipe Joint Development Zone (JDZ), described as one of the least explored hydrocarbon frontiers in the Gulf of Guinea.
To revive interest, the authority is offering improved fiscal terms, including lower signature bonuses and fewer regulatory hurdles than in previous licensing rounds held in the 2000s.
The JDZ was created under a 2001 treaty between both countries and spans about 34,540 square kilometres of shared maritime territory. Operations in the zone follow a Production Sharing Contract structure, with benefits shared in a 60:40 ratio in Nigeria’s favour.
Initial exploration between 2003 and 2007 produced discoveries estimated at about 270 million barrels of crude. However, the finds were considered too small to justify the high cost of developing fields located in ultra-deepwater conditions. As a result, major international oil companies, including Chevron, Texaco, and Total, withdrew from the zone.
Acting Chairman of the JDA, Mohammed Ibrahim, said advances in technology and different cost structures for smaller operators could make the basin more attractive today than it was two decades ago.
He cited the Obo-1 field, believed to contain between 50 and 100 million barrels, as an example of discoveries previously seen as marginal for large oil firms but potentially viable for independent producers.
Ibrahim added that earlier bid rounds generated about $123 million in signature bonuses for the authority, but interest declined when drilling results did not meet commercial expectations.
The renewed push is aimed at giving the offshore zone another opportunity to deliver on its long-held promise, with both countries hoping that new investors and friendlier terms can finally unlock its oil potential.
