ERHC Energy Inc (ERHE)

[greenmonster]

The Nigeria, Sao Tome and Principe Joint Development Zone (JDZ)yesterday earned the sum of $271 million (about N34.959 billion) being the signature bonuses to be paid for two new oil licenses awarded to local and foreign companies.

ExxonMobil yesterday revealed plans to invest on annual basis $2 billion in oil and gas exploration and production in Nigeria towards achieving a production capacity of 1.0 million barrels per day by 2010.

The oil revenue to be shared by both countries came from the award of two oil blocks 2, 3 and 4, in the JDZ, located in the Gulf of Guinea.

Sinopec and Addax/ERHC Energy clinched block 2 after posting a signature bonus of $71 million (about N9.159 billion). It is expected that Sinopec would operate the block on behalf of the other parties.

US oil firm Anadarko along side ERHC Energy/Addax Petroleum Consortium clinched the operator-ship for block 3 after posting a signature bonus of $40 million (about N5.160 billion).

Block 4 went to the Addax/ERHC Energy consortium along with Conoil Producing, Overt Energy, Hercules Energy and Godson Energy, for a signature bonus of $90 million (about N116.1 billion).

The companies involved are expected to pay up the signature bonuses within the next 30 days.

This brings to $324 million (about N41.796billion)the total sum of money to be shared by both countries from the award of oil licenses in the JDZ.

US oil major Chevron and its partners in JDZ Block 1, ExxonMobil and Dangote-EER, had earlier paid $123 million (about N15.867billion) for the block awarded in 2003.

The provision of the treaty signed by the two countries indicates that Nigeria will get 60 percent of the revenue and Sao Tome, 40 percent.

While speaking at the signing of the Production Sharing Contract (PSC) agreements with the contractors in the two blocks, Dr. Edmund Daukoru, Nigeria's Minister of State for Petroleum Resources commended the Joint Development Authority (JDA), the body administering hydrocarbon resources in the JDZ, officials of both countries and the oil companies for ensuring that the agreements were finally concluded and signed.

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He said concluding the award of the acreage had not come easily, noting that at a point during the negotiations, US oil firm Noble Energy withdrew its operator-ship of block 4, leading to ERHC Energy signing a memorandum of understanding with Swiss firm Addax Petroleum. "Negotiation of a PSC is by no means an easy task, as it involves exhaustive and careful discussions to arrive at a consensus which all parties will have to abide by for a very long time," he said.

It would be recalled that the signing of the PSC for the oil blocks had been shifted severally, the last being the botched attempt on February 28, 2006 with officials from Sao Tome demanding postponement to enable them further study the agreement.

Daukoru noted that the Joint Ministerial Council (JMC) has been directed to fast-track negotiations to ensure the signing of the PSCs for the remaining three blocks awarded along with Block 3 and 4 at the 2004 JDZ Licensing Round.


http://allafrica.com/stories/200603160151.html

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