Overlapping claims - United Nations in Cambodia

Fuelling Poverty Reduction
Although the two countries did not renounce their claims to the zone, the Treaty
called for joint exploration of natural resources for a period of 45 years, unless otherwise
agreed after a review in the 30-year period.
The Joint Development Authority (JDA) for the JDZ, which is based in Abuja, Nigeria
with a liaison office in São Tomé and Príncipe, was created to manage the exploitation
of resources in the JDZ.
The JDA responds to the JMC (the Joint Ministerial Council of the Joint Development
Authority for the offshore Joint Development Zone between the Federal Republic of
Nigeria and D.R. São Tomé and Príncipe), comprised of four ministers or officials of
equivalent rank from each country.
The JMC is the ultimate decision-making body for the JDZ. Decisions taken by JMC
and JDA are made by consensus. If the JMC deadlocks, the dispute is referred for
resolution to the heads of state of the two countries.
In 2002, the JDA established under the treaty began operations with the inauguration
of four executive directors – two for São Tomé and Príncipe (commercial and
investment and non-hydrocarbon) and two for Nigeria (administration and finance,
and monitoring and inspection).
JDA launched the first licensing round in the JDZ in 2003, and the 2nd licensing round
in 2004. In 2005, JDA signed the first Production Sharing Contract (PSC) for Block 1 in
the JDZ, known as OBO1 (operated by Chevron). JDA signed PSCs for Blocks 2, 3 and
4 in 2006.
The signature bonuses from these blocks were shared by both countries – 60 percent
for Nigeria and 40 percent for São Tomé and Príncipe.
So far, our experience in dealing with overlapping claims areas has been interesting
and challenging in the sense of meeting international standards and governance
requirements, as well as in dealing with the burden of operating costs related to the
management of the JDZ. In terms of transparency, both heads of state signed the
Abuja Declaration that imposes transparency practices in all of the operations carried out
in the JDZ.
Oil production in the overlapping claims zone will begin in 2012. Until then, the state
parties will continue to finance the operating costs of the JDA.
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UNDP Discussion Paper No. 6