Sao Tome and Principe, once a leading cocoa producer, is poised to profit from the commercial exploitation of large offshore reserves of oil.
But arguments have arisen over how to spend the expected windfall, leading to political tension.
One of Africa's smallest countries, Sao Tome and Principe consists of two islands of volcanic origin and a number of smaller islets.
From the late 1400s Portugal began settling convicts on Sao Tome and establishing sugar plantations with the help of slaves from the mainland. The island was also important in the transshipment of slaves.
The colony's aspirations for independence were recognised after the 1974 coup in Portugal and at first the Movement for the Liberation of Sao Tome and Principe was the country's sole political party. However, the 1990 constitution created a multi-party democracy. The island of Principe assumed autonomy in 1995.
Sao Tome and Principe is trying to shake off its dependence on the cocoa crop. Falls in production and prices left the island state heavily reliant on foreign aid. The government has been encouraging economic diversification and is set to exploit the billions of barrels of oil which are thought to lie off the country's coast.
Drilling is under way and commercial production is expected to begin within a few years.
Promoters of tourism say the islands have plenty for visitors to see. But hurdles include ignorance about the country, the difficulties of getting there, and what some say is an exaggerated fear of malaria.
President: Fradique de Menezes
Fradique de Menezes, a wealthy cocoa exporter, was elected in July 2001 and re-elected in 2006.
A week-long military coup in July 2003 toppled his government, while the president was on a private visit to Nigeria. Mr De Menezes returned to Sao Tome after an agreement to restore democratic rule was reached with the coup leaders.
He is the son of a Portuguese father and Sao Tomean mother and had dual citizenship before dropping his Portuguese citizenship so that he could qualify as a presidential candidate.
The president wants revenues from new offshore oil fields to be used to improve public services. He is keen to reduce Sao Tome's isolation and favours stronger ties with West Africa.
Mr De Menezes is the country's third president, after Miguel Trovoada, who served two five-year terms, the maximum permitted by the constitution (1990-2001) and Pinto da Costa (1975-1991).
He studied in Portugal and Belgium and occupied several political and diplomatic positions, including foreign minister and ambassador in Europe.
Under the democratic constitution adopted in 1990, the president shares power with a government headed by a prime minister, who needs the confidence of parliament to stay in power.
Prime minister: Patrice Trovoada
Patrice Trovoada was named prime minister after his Independent Democratic Action (ADI) party won parliamentary elections in August 2010.
The ADI failed to gain an overall majority in parliament. It won 26 out of the 55 seats, leaving Mr Trovoada two seats short of a majority.
Mr Trovoada, who served as prime minister in 2008, said that governing with a parliamentary minority "is not a problem", noting a previous government was able to survive with 23 seats.
He included in his new government three ministers from other parties. Since the end of one-party rule in 1991, Sao Tome has had a series of fragile governments.
Mr Trovoada is the son of former president Miguel Trovoada and has served as foreign minister and presidential adviser on oil issues.
A chronology of key events:
16th century - Sao Tome colonised by the Portuguese, who bring in slaves to work sugar plantations. Becomes important staging post for slave trade.
1800s - Cocoa introduced. Sao Tome develops into one of world's main cocoa producers.
1951 - Becomes overseas province of Portugal.
1960 - Formation of nationalist group which later becomes the socialist oriented Movement for the Liberation of Sao Tome and Principe (MLSTP).
1974 - Military coup in Portugal. Portuguese government recognises islands' right to independence, acknowledges MLSTP as sole representative in negotiations. Unrest followed by exodus of Portuguese.
Independence
1975 12 July - Independence, with Manuel Pinto da Costa (MLSTP) as president; and Miguel Trovoada as prime minister. Plantations nationalised, strong ties built up with communist countries.
1978 - Government announces suppression of coup attempt, brings in Angolan troops for support.
1979 - Trovoada arrested, accused of complicity in coup attempt. He is released and goes into exile in 1981.
1980s - Government scales down links with communist world as economy deteriorates. Declares itself nonaligned, seeks Western support for recovery plans.
1988 - Coup attempt.
1990 - New constitution allows opposition parties, provides for multi-party elections and restricts president to two five-year terms. Trovoada returns from exile.
Multiparty elections
1991 - First multiparty elections. Renamed MLSTP-PSD loses majority. Transitional government installed, pending presidential elections, subsequently won by independent candidate Trovoada.
1992 - Popular unrest sparked by austerity measures.
1994 - MLSTP-PSD regains power. Parliament grants Principe local autonomy
1995 - Trovoada toppled and detained in bloodless coup by soldiers but is reinstated within days after pressure from donor countries.
1996 - Trovoada re-elected president. Popular protests over economic hardships.
1997 - Unrest over economic conditions.
Sao Tome establishes formal diplomatic relations with Taiwan at Trovoada's behest. The move is condemned by the government. China retaliates by suspending ties.
1998 - MLSTP-PSD wins general elections, Guilherme Posser da Costa appointed prime minister.
2000 - Civil servants strike to press for higher pay. Officials say country's external debt in 1998 amounted to US $270 million, more than five times the country's annual gross domestic product of around US $50 million.
De Menezes sworn in
2001 - Businessman Fradique de Menezes is declared the winner in the presidential election in July and is sworn into office in early September.
2002 March - MLSTP narrowly wins parliamentary elections. De Menezes appoints Gabriel Costa as prime minister and both main political parties agree to form broad-based government.
2002 August - President De Menezes announces plans for a US naval base in the country, which would aim to protect Sao Tome's oil interests.
2002 October - President De Menezes names new government with Maria das Neves as premier. It replaces administration led by former prime minister Gabriel Costa, which was dismissed by De Menezes in September.
2003 16 July - Military coup topples the government. President De Menezes, in Nigeria at the time, returns to Sao Tome a week later after an agreement is struck with the junta. A general amnesty is given to the coup leaders.
Coup attempt
2003 October - Oil companies bid for offshore oil blocs controlled by Sao Tome and Nigeria. Bids are expected to generate hundreds of millions of dollars in licence money for Sao Tome.
2004 March - Row between president, prime minister over control of oil deals threatens to topple government. Four cabinet ministers are replaced.
2004 September - President De Menezes sacks the prime minister and government after a series of corruption scandals. A new prime minister is sworn in.
2004 December - Parliament approves oil law designed to protect revenues from corruption.
2005 February - Sao Tome - jointly with Nigeria - signs its first offshore oil exploration and production-sharing agreement with international oil firms.
2005 June - Prime minister and government resign. Head of the central bank Maria do Carmo Silveira becomes the new premier.
2006 March - Protests against poor living conditions disrupt parliamentary elections in some constituencies, delaying announcement of results. The president's Democratic Movement of Forces for Change (MDFM) is declared winner, taking 23 of the 55 seats in parliament.
Debt waived
2007 March - World Bank, IMF forgive $360 million in debt owed by Sao Tome. This represents about 90% of the country's foreign debt.
Nigeria and Sao Tome agree to establish a joint military commission to protect their common oil interests in the Gulf of Guinea.
2008 February - Opposition leader Patrice Trovoada becomes prime minister.
2008 May - Prime Minister Patrice Trovoada dismissed after no-confidence vote.
2008 June - Rafael Branco, head of Sao Tome's second largest party, sworn in as prime minister at head of a new governing coalition.
2008 December - Several high-ranking former government officials, including to ex-prime ministers, appear in court in Sao Tome's largest corruption scandal.
2009 February - Government says coup plot foiled.
2009 December - Nigeria and Sao Tome agree to set up a joint maritime military commission to protect offshore crude oil fields.
2010 January - Opposition leader Arlecio Costa, jailed over February 2009 coup plot, is pardoned.
2010 March - Sao Tome opens tenders for oil exploitation.
2010 August - Opposition Independent Democratic Action (ADI) party wins parliamentary elections. Patrice Trovoada becomes premier.
