São Tomé and Príncipe

EITI Status Suspended for missing deadline
Joined EITI in 2008
Latest Data From 2017
Latest Validation 2017
Website EITI São Tomé and Príncipe
Last updated 9 June 2021

Overview

São Tomé and Príncipe is exploring for oil in two different zones under different jurisdictions: The Joint Development Zone (JDZ) with Nigeria, and the Exclusive Economic Zone (EEZ). So far oil has not been discovered in commercially viable quantities. With the downturn in the price of oil, the government is looking at how to make the zone more competitive and attract new investors to continue exploration. The EITI is helping to inform the dialogue on rethinking how both the EEZ and the JDZ could attract investment while being managed in line with international best practice. EITI Reports have reviewed the legal, contractual and fiscal frameworks applicable to the oil sector.

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Tax and legal framework

Over the last 10 years, Sao Tome and Principe has been developing a set of rules that aim to legally frame the extractive sector while simultaneously making it more attractive. The main laws governing the legal framework of the extractive activities, namely in the oil sector are:

  • Law 8/2004 – Framework-Law governing Oil Revenues
  • Law 15/2005 – Law governing Oil Taxation
  • Law 16/2009 – Framework-Law governing Oil Operations 
  • Decree 11/2008 - Approves the Production Sharing Contract Model
  • Decree-Law 5/2004 – Establishes the National Petroleum Agency
  • Decree-Law 7/2014 –Approves the National Petroleum Agency’s new Statutes

The above legislation is complemented by the following norms: the Abuja Declaration on the Transparency and Good Governance of the Joint Development Zone and by Decree 57/2009 – Organization of the Exclusive Economic Zone of São Tomé and Príncipe in exploration zones and oil blocks.

The oil industry’s contribution to the tax system and to the collection of revenue exclusively of a tax nature has been practically nil over the years, given the production inactivity both in the EEZ and in the JDZ.

License

The National Petroleum Agency (Agência Nacional do Petróleo - ANP) manages the license granting process on behalf of the government. ANP requests bid proposals for oil contracts through public advertisements placed in the national and international media, including those media typically used in the oil and gas industries. The government may negotiate oil contracts directly with companies when these are considered matters of public interest, and if there is a lack of bid proposals that meet the criteria. 

Beneficial ownership disclosure

Objectives of beneficial ownership transparency in São Tomé and Príncipe 

  • Promoting transparency and good governance to ensure good investment climate
  • Promoting sustainable publication of real owners of companies operating in STP
  • Developing an institutional framework favourable to beneficial ownership disclosure
  • Prevent and avoid conflict of interest and define the concept of PEPs
  • Guarantee universal, free, easily accessible and comprehensible information on beneficial ownership

Progress on implementing beneficial ownership disclosure

São Tomé and Príncipe plans to support comprehensive beneficial ownership provisions in Minerals Policy, which will inform amendments to the Mines and Minerals Act, the new Corporate Governance Code (late 2016 or early 2017), and propose amendments to Petroleum Act and Companies Act. Sao Tome and Principe EITI plans to organize a series of workshops to build capacity for beneficial ownership disclosure. Read São Tomé and Príncipe's beneficial ownership roadmap below for more information.

São Tomé and Príncipe EITI beneficial ownership roadmap
It is very important for us to give citizens reliable information to allow them to be an effective part in the participatory budget process
Violeta de Herrera, mayor of Castilla who is piloting a regional EITI

Production

There is currently no production in São Tomé and Principe, although exploration is ongoing.

Natural resources

São Tomé and Principe has for the past decade prepared itself for oil production and explored oil offshore. So far, no commercially viable oil discoveries have been made.

Revenue collection

São Tome and Príncipe received roughly USD 300 million in oil exploration revenue between 2003 and 2013, mainly from signature bonuses. Companies signed agreements to explore in the Exclusive Economic Zone. As the results have been disappointing, fewer companies are exploring offshore and revenues have decreased significantly. The latest report notes that the Joint Development Authority (JDA) received, in 2015,as a signature bonus, the amount of 1,656,250 USD being the only revenue for that year.

São Tome and Príncipe: The 11-year quest for oil under scrutiny

Initializing chart.

Revenue allocation

All revenue from oil exploration are deposited into the national oil account, from which a maximum of 20% of the balance can annually be transferred to the state budget. At the end of 2015, there was roughly USD 10 million left in the account. The National Petroleum Agency (ANP) collects administration fees.

In accordance with the Contract celebrated between Nigeria and São Tomé and Príncipe, the revenues received by the JDA from the JDZ operators should be distributed in a 60%/40% ratio to the Federal Government of Nigeria and to São Tomé and Príncipe, respectively.

Implementation

On 1 March 2021, São Tomé and Príncipe was temporarily suspended for not publishing their 2018 Report on time. The publishing deadline was previously extended by the Board as per the decision 2021-16/BM-49.

 

São Tomé and Príncipe was found to have achieved meaningful progress in implementing the EITI Standard. View more information under the Validation section of this page or go to the Board's decision in full. Previously, the country was compliant under the 2011 Rules.

The EITI process is supported by all stakeholders and reports are creating debate especially about the management of the JDZ and social payments. In February 2016 the Board approved STP’s request for adapted implementation related to revenue reconciliation and contextual information related to the Joint Development Zone (JDZ) with Nigeria.

In April 2019, the Board approved São Tomé and Príncipe's request for adapted implementation.

Governance

The National Coordinator is Jose Cardoso. EITI Champion is Minister of Finance Américo dos Ramos. The MSG has ten members, including representatives of the media and of the autonomous region of Príncipe. STP-EITI has a sub-committee with Nigeria EITI that coordinates EITI reporting in the Joint Development Zone.

Timeline

Validation

São Tomé and Príncipe was found to have achieved meaningful progress in implementing the EITI Standard. View more information under the Validation section of this page or go to the Board's decision in full. Previously, the country was compliant under the 2011 Rules.

Sao Tome's fourth Validation will commence on 1 July 2022 in accordance with the revised Validation schedule (Decision 2020-92/BC-300).

Board decision in full
Documentation: Validation Report and initial assessment
Country statuses explained

Sao Tome and Principe's progress by requirement

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EITI Reports and other key documents

This is the Sao Tome and Principe EITI 2017 Annual Progress Report in Portuguese.

São Tomé and Príncipe Validation 2018

Published Date: 
June, 2017
Publisher: 
EITI

On 29 June 2018, the EITI Board agreed that São Tomé and Príncipe has made meaningful progress with improvements. See Board decision 2018-36/BM-40/BP-40-6-E

In this second Validation, the EITI International Secretariat has assessed the progress made in addressing the ten corrective actions established by the EITI Board following STP’s first Validation in 2016. See more under background below. 

Timeline of Validation and related materials

Read more
View all documents related to Sao Tome and Principe in our publications library

Contacts

National Coordinator

Mr José Fernandes ROSA CARDOSO

Mr José Fernandes ROSA CARDOSO

Alternate
National Coordinator, São Tomé e Principe
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International Secretariat

Michael Uzoigwe

Michael Uzoigwe

Country Manager – Anglophone Africa
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