ERHC Energy Inc (ERHE)

[rambus]

Existence of Oil
As established earlier, while there is oil in Sao Tomé and Principe, the resources are not significant enough to be commercially viable.32 Almost all of the acreage in the EEZ and in the JDZ is in deeper than 2000m (ultra deep waters) and the Chevron-operated Bloc 1 is on the boundary line in the JDZ. The reason for the considerable size of signature bonuses is the fact that the region is similar to what can be found in the Niger Delta basin: it houses the same reservoirs and same structures. As such, it is likely Chevron bid on what was, in its opinion, the best block in JDZ, and in early 2006 it carried out the first drill which uncovered hydrocarbons in several layers, but not enough for the development of a facility.33
31 Contribution by Sarah Wykes, Global Witness, Tuesday October 30 2007.
32 Presentation by Tim Parsons, Chevron, Tuesday October 30 2007.
33 Ibid.
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It is important to highlight, therefore, that although there is much expectation of huge oil reserves in STP, most of these predictions are hypothetical and not based on fact. It is, as yet, very early in the exploration phase and actual production is years away. Moreover—and most significantly—however there exists a confidentiality agreement between Chevron and the JDA that essentially restricts the information available to the public.35 It is evident, therefore, that while there is a willingness on the part of the company to avail information, transparency within the JDZ is limited. In light of these facts, Chevron believes that it is premature to staff an office with the objective of oversight of oil revenues at this stage since the oil revenues can essentially be summarized on one sheet of paper: signature bonuses have been documented, as have annual acreage fees, as well as training and social funds.36 Therefore, while Chevron maintains its full commitment to the principles of EITI and transparency, the company believes that meetings of an EITI Committee two or three times a year are sufficient to update information and keep stakeholders informed.

http://www.international-alert.org/pdf/National_Discussion_Oil_Revenue_Management_STP.pdf