Nigeria and Sao Tome pin hopes on new technology in joint oil zone

SAO TOME (Reuters) - Nigeria and Sao Tome and Principe plan to use non-conventional oil exploration technology in their joint offshore zone and hope to start oil production within 18 months, according to a statement issued by the countries. Sao Tome, a tiny former Portuguese colony in Africa's Gulf of Guinea, is surrounded by oil-rich neighbours but has so far failed to find oil after several years of prospecting. Oil executives say they were not hopeful for major finds in Sao Tome's waters although the northern part of the joint zone near Nigeria is generally seen as having more promise. "Important decisions have been taken about the area and the organisation, such as the approval of new technology for oil and gas exploration as well as production at the Block 1 via non-conventional methods that will allow production to start in an 18 months' time," according to the joint statement, following a council meeting on developing the area. It gave no details on what technology was envisaged. A senior source who attended the meeting said both parties wanted to do more to develop the acreage but denied that an agreement had been reached on using new technology. "The council was not conclusive," said the source. Nigeria pumps just under 2 million barrels of oil a day, making it Africa's largest oil producer. Sao Tome's government in February short-listed four companies, including Portugal's Galp Energia, to bid on two oil blocks in its exclusive economic zone, according to a statement released by state oil company ANP. [ID:nL5N0LB3HZ]