Oil deal for Nigeria and Equatorial Guinea

Border disputes often hinder development of offshore reserves

By the BBC's Mannir Dan-Ali Abuja

Nigeria and its neighbour Equatorial Guinea have agreed plans for joint exploitation of crude oil reserves along their maritime border.

In an approach that is starkly different from that which has seen Nigeria and Cameroon slugging it out at the world court over the oil rich Bakassi peninsular, the issue of the equally rich maritime border between Nigeria and Equatorial Guinea is being handled in a brotherly way.

Presidents Olusegun Obasanjo of Nigeria and Obiang Nguema Mbasogo of Equatorial Guinea have signed an agreement which allows companies on both sides of their maritime border to explore for oil.

According to Nigerian foreign minister Sule Lamido the proceeds will be shared on a 60:40 basis between Nigeria and Equatorial Guinea .

Delicate

Agreement on developing the Zafiro-Ekanga oilfield comes after years of negotiations.

Oil industry experts say the area covered by the agreement is thought to contain substantial deposits of oil.

The agreement also covers the processing, transporting and marketing of the oil.

President Obasanjo praised the way the two countries were able to handle what he called a delicate issue.

The two leaders also called on the oil companies benefiting from the agreement, TotalFinaElf and ExxonMobil, to ensure its smooth implementation.

A joint communique called on other African countries to emulate their example by settling all boundary problems through bilateral negotiations.