ERHC Energy Inc (ERHE)

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Nigeria: ERHC Declares Non Rivalry With Afren
Sopuruchi Onwuka
15 March 2010

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Lagos — American international energy investment company, ERHC, said its foray into the Nigeria's petroleum industry would not conflict with the business interests of other indigenous multinational firms already on ground.

Before the entry of ERHC and its declaration of acquisition interest in third party assets in the country, another multinational with strong Nigerian interest, Afren, had been bullish with marginal assets operated by mainly cash strapped indigenous players.

Whereas London-based Afren is co-founded and substantially owned by Minister of Petroleum Resources, Dr. Rilwan Lukman, Houston-based ERHC has Nigeria's Chief Emeka Offor as its core investor.

Chief Operating Officer of ERHC, Mr. Peter Ntephe, said the two companies would instead of becoming rivals cooperate to channel international investment capital in development of the Nigerian indigenous capacity for exploration and production.

He said business opportunities in the Nigerian oil and gas industry are very vast, making it unnecessary for rivalry and competition, adding that ERHC would rather see Afren as partners instead of competitor.

"We do not look at companies like Afren as competitors at all. We look at them as peer group, doing similar things as we do and people we hope to collaborate with," Mr. Ntephe declared.

He said ERHC would collaborate with companies with similar vision to promote investments in the Nigerian petroleum industry, and to promote companies with Nigerian face as an important aspect of the company's corporate business culture.

"As far as we are concerned, there is a vacuum in the private sector participation of Nigerians in the international exploration and production business'" he said, adding that participation at that height would enable Nigerian companies access international capital markets to meet their funding needs in order to play in a capital intensive industry.

According to him, companies like Afren and ERHC are leading indigenous world class corporate structures that would meet the requirements of foreign capital markets in order to gain access to investment funds.

He added that the companies that operate at international levels hold promises of redefining corporate business models for local firms to follow. Such models, according to him, had been hitherto lacking in the local business environment.

"We think that companies like Afren, companies like ERHC have opened the door and displayed the new model that hopefully, others can build on and probably do better."

Meanwhile, ERHC says it awaits the Joint Development Authority (JDA) between Nigeria and Republics of Sao Tome and Principe (STP) to post positive results on the drilling campaign the joint marine development zone between the two countries in the deepwater Gulf of Guinea.

Mr. Ntephe, told Business Champion in Abuja that the American multinational energy investment company, expects that results from the JDA would provide the lead into nature of the zone's sedimentary structure.

He dismissed concerns over commerciality of the finds made in the drilling campaigns as premature; explaining that the full picture of the zone's prospectivity would come with cumulative result of the different data collated at the end of planned drilling.

According to him, only the first phase of exploratory wells have been drilled while a second phase was being worked out between the company and her technical partners in exploitation of mineral deposits in the fields.

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"So let's look at the results of the first phase together before we can pass any judgment on the prospectivity of the fields and how well our expectations have been met," Mr. Ntephe said.

In emphasizing that the region comprising the Joint Development Zone (JDZ) and the Exclusive Economic Zone (EEZ) of STP holds high promises of commercial hydrocarbon reserves, Mr. Ntephe pointed at world class discoveries in neighboring sedimentary basins offshore Niger Delta, Gabon and Angola.

"If you look at the Gulf of Guinea, especially as it circles STP, you could see that there are world class oilfields there in Equitorial Guinea, Gabon, off course the Niger Delta Nigeria, and moving further down to Angola. And even from just a layman's perspective, the chances that prospectivity around STP are very high," he declared.