ERHC Energy Inc (ERHE)

[RUBY1100]

JDA okays Sao Tome pairing

By Upstream staff


Nigeria and Sao Tome's Joint Development Authority (JDA) has approved Houston-based ERHC Energy's request to replace Noble Energy with Addax Petroleum in a consortium that won oil drilling rights.

Noble, which won a 60% equity in block 4 of the jointly-administered area in May, withdrew from the consortium prompting ERHC to sign a deal with Swiss-based Addax, ceding operatorship of the Gulf of Guinea block.

The JDA said the new consortium must accept all of the terms of the award and pay a $90 million signature bonus before Addax can take on the role of operator.

The ERHC/Addax consortium must also accept the production sharing contract timeline and agree to accelerate joint operating agreement negotiations with other shareholders.

Addax, which already operates four licences in Nigeria, carries a technical partner agreement with Overt Ventures, which was assigned a 5% stake in block 4, according to Reuters.

Nigerian Conoil and two small Nigerian companies also hold small stakes in block 4.