Jay Pryor, managing director of lead partner ChevronTexaco's (CVX.N: Quote, Profile, Research) local unit, said the contract with the two African nations was made under a "new standard of accountability", allowing for public disclosure of payments.

"We are very pleased to have reached this milestone," Pryor said in a statement.

ChevronTexaco has 51 percent of the equity, while ExxonMobil (XOM.N: Quote, Profile, Research) has 40 percent and Dangote Energy Equity Resources, a small Nigerian/Norwegian company, holds 9 percent.

The production sharing contract for the previously disputed offshore area was made possible by the creation of a Joint Development Zone in 2000, under which revenues are shared by Nigeria with 60 percent and Sao Tome with 40.

The licensing process began in October 2003 with a bid round in which the consortium offered a $123 million signature bonus, but it has taken until now to sign the first contract due to lengthy negotiations over contract details.

The signature bonus is now due for release.

Industry sources said the contract provided for an eight year exploration period, after which the consortium must relinquish half the area, followed by a 20-year renewable production period.

COUPS, CORRUPTION

A tiny and impoverished nation of 170,000 people, Sao Tome has been rocked by coup attempts and accusations of corruption as it prepares to become the latest African petro-state.
It is located in the centre of the Gulf of Guinea, where several major oil discoveries in deep water over the last 10 years have turned it into one of the world's exploration hotspots. The United States hopes to import a quarter of its oil from the Gulf of Guinea region in a decade, from 14 percent now.

Sao Tome President Fradique de Menezes survived a military coup in 2003 by giving the military rights to oversee oil deals amid accusations of corruption. In May last year, four ministers were reshuffled in a political row over shady oil deals.

Nigeria, ranked the third most corrupt nation in the world by watchdog Transparency International, has launched a high-profile campaign to crack down on graft. A keenly awaited audit of Nigerian oil revenues is months overdue.

The world's eighth largest oil exporter, Nigeria loses about five percent of its output to theft by well-connected criminal syndicates.

Scandal hit the Joint Development Authority in June last year when Sao Tome sacked two senior members of the authority for unspecified reasons and nominated one of its citizens to replace a Nigerian at the head of the body. The authority released a statement in the same month saying bribery of licensing officials would not be tolerated.