(Ecofin Agency) - The National Petroleum Agency of Sao Tome and Principe has announced that the country has agreed to terminate an oil concession awarded to Sinoangol, for breach and violation of contract.

Sinoangol is a joint venture between China's Sinopec and Angola's state-owned petroleum companies, Sonangol.

A report on the Extractive Industries Transparency Initiative's website, revealed that in 2014, Sinoangol paid $100,000 to Sao Tome and Principe’s National Oil Account as a transfer fee on the termination of 30% of its interest in block 2 to Sonangol.

“Among several breaches and violations, Sinoangol never provided the Sao Tomean state with information regarding the amount received from the transfer of 30 percent of participatory interest in block 2 that occurred on March 31, 2014,” Orlando Pontes, Director of the National Petroleum Agency (ANP) said in a statement.

Sao Tome is bordered by oil-rich countries but the country has been unsuccessful in finding crude oil after many years of searching. But, more than a few companies are searching for crude in blocks considered to yield it in the long run.

Sinoangol secured the block in 2013 and vowed to invest $154 million in developing it, but Pontes said that tax due to the state from the transfer of its stake is yet to be paid.

Other companies active in Sao Tome and Principe include, Equator Exploration Ltd on blocks 5 and 12, as well as Houston-based ERHC Energy Inc in block 11, Reuters reports.

Anita Fatunji