ERHC News, Oct 31 ERHC partners Addax ...
ERHC partners Addax in Nigeria-Sao Tome oil permit
Mon Oct 31, 2005 11:44 AM ET
ABUJA, Oct 31 (Reuters) - Nigeria and Sao Tome have approved Houston-based ERHC Energy's (ERHE.OB: Quote, Profile, Research) request to replace Noble Energy with Addax Petroleum in a consortium that won oil drilling rights, authorities said on Monday.
Noble Energy withdrew from the consortium which won a 60 percent equity in Block 4 of the jointly-administered area in May, after which ERHC signed a deal with Addax giving the Swiss-based energy firm operatorship of the offshore block.
"Following the withdrawal ... and the request by ERHC to replace Noble Energy with Addax Petroleum in the consortium, the JDA has since reviewed and accepted the request," the Joint Development Authority (JDA) said in a statement. The JDA, which administers the Nigeria-Sao Tome and Principe Joint Development Zone in the Gulf of Guinea, said the new consortium must accept all the commercial and technical terms of the award and pay a $90 million signature bonus before Addax can assume the role of operator.
The ERHC/Addax consortium must also accept the production sharing contract timeline and agree to speed-up joint operating agreement negotiations with other shareholders, the JDA said.
Addax, which already operates four licences in Nigeria, has a technical partner agreement with Overt Ventures, which was assigned a five percent stake in Block 4, the JDA said. Nigerian Conoil (NTOL.LG: Quote, Profile, Research) and two small Nigerian companies also have small stakes in Block 4.
Other energy firms that won rights to exploration blocks in the second licensing round in May include Devon (DEV.N: Quote, Profile, Research) and Anadarko (APC.N: Quote, Profile, Research) .
The JDA has awarded five offshore blocks in the Gulf of Guinea, which has become one of the world's exploration hotspots since a series of huge oil finds in the last 20 years, but the process has been marred by delays, bickering and accusations of corruption.
Nigeria, the world's eighth biggest oil exporter, and Sao Tome and Principe hope jointly to receive $400 million in signature bonuses for the five blocks.
