Under the original treaty Nigeria was to have total rights over Oil Block 246, considered the most prolific in the joint development zone shared by the two countries. In exchange, Sao Tome was to receive 10,000 barrels per day of crude oil and 250 scholarships, and have an oil refinery and a deep water port built for it.
Oil produced in the rest of the joint zone was to be split 60:40 in Nigeria’s favour.
Following his election last year, President Federico de Menezes expressed reservations about the deal and sought a renegotiation of its terms. This resulted in the suspension of the award of oil blocks, which was to have been done in October last year.
Revenue from all the oil blocks will now be shared by the two countries.