ERHC Energy Inc (ERHE)

[kingpindg]

ERHC part of Lusophone consortium...?

Don't recall us ever being directly mentioned as part of this before...

IOC Competition Hots Up As Licensing Round Approaches

Some of the world's largest international oil companies (IOCs) are competing for the highly-promising blocks on offer in São Tomé and Príncipe's upcoming licensing round, Luís Prazeres, head of the country's state run oil company, told Reuters on May 11. Prazeres told Reuters that US majors ConocoPhillips and Chevron, Brazil's state-run Petrobras and Anglo-Irish independent Tullow Oil were all vying for blocks. Additionally, India's state-owned ONGC Videsh (OVL), Germany's RWE and US independents Marathon Oil and Murphy Oil have separately expressed their interest in the round. The widespread interest is a very positive sign for the round and the prospects for São Tomé and Príncipe joining the group of West African oil producing countries, comprising Nigeria, Equatorial Guinea, Cameroon and Gabon, all of which have earned billions of dollars producing oil from the Gulf of Guinea.

Prazeres first announced details of the bidding process at an international oil and gas conference in London in March 2010, at which he set about drumming up interest from IOCs. According to Prazeres, the licensing round will auction seven blocks from São Tomé and Príncipe's exclusive economic zones (EEZs) A and B, including Blocks 1, 2, 3 and 6 in Zone A and Blocks 7, 8 and 13 in Zone B. According to Prazeres the interested companies are examining seismic data before the September 15 deadline, at which time successful bidders will be awarded production sharing agreements (PSAs). Officials from São Tomé and Príncipe reportedly met oil company executives in Houston in April to discuss the terms of the eventual PSAs.

In addition to its EEZ, the archipelagic nation has a 40% interest in the Joint Development Zone (JDZ) it shares with neighbouring Nigeria, but has so far struggled to develop a domestic oil industry. Prazeres has said that stable income from oil revenues for the country could be expected within five to six years. BMI views this timeline as optimistic given how underdeveloped the industry is and the delays and setbacks that have so far hindered development, but does see longer-term potential given the country's location in the oil-rich Gulf of Guinea. If, however, the round attracts large well-capitalised IOCs into the country's nascent oil industry, development could move quickly. The country had hoped to begin production from its EEZ in 2011, but drilling efforts in 2003 and 2007 failed to yield commercial production opportunities.

Activity in São Tomé and Príncipe is not limited to the bidding round. US-based ERHC Energy Galp Energia, Angola's Sonangol and São Tome state-run company Petrogás have reportedly been in talks to form a Lusophone consortium to launch exploration activities in the EEZ. A São Tome government spokesperson tentatively put the government's support behind such an arrangement, saying that it would be useful for the development of the state-run company and the country's oil industry.

http://www.pennenergy.com/index/articles/newsdisplay/1188844638.html