ERHC Energy Inc (ERHE)

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STP NEWS Sao Tome: Contracts for 2 blocs to be inked at Tuesday oil meet in Abuja


Sao Tome, March 13 (Lusa) - A ministerial delegation from Sao Tome and Principe departed Monday for Nigeria to sign production sharing contracts for two offshore oil blocks in the joint Gulf of Guinea exploration area operated with Abuja, the archipelago's oil minister said.

Speaking before flying to Abuja, Natural Resources Minister Deolindo da Costa said that among business on the agenda at Tuesday's meeting of the Joint Ministerial Council (JMC) in Abuja was the signing of production sharing contracts (PSCs) for Blocks 4 and 3 in the two countries` Joint Development Zone (JDZ).

If the Abuja meeting is fruitful, Blocks 3 and 4, with signature bonuses of USD 40 million and USD 90 million respectively, will become the first of five JDZ blocs awarded last May to be formally wrapped up.

The two blocks are operated by ERHC, a Nigerian-controlled, US- listed company, and Addax of Switzerland.

ERHC won preferential interests in all five JDZ blocks awarded last year.

An earlier attempt to sign PSCs for Block 4 last month was thwarted when Sao Tome's delegation left Abuja without signing the documents.

Nigeria's oil minister charged Sao Tome with bad faith and called for a public apology for the scuppering of the deal.

The archipelago denied responsibility for the flop, blaming Abuja for trying to force it to ink contracts that had been altered to give a small Nigerian firm 9% of ERHC's stake in the block.

RCN/CJB.

Lusa