After years of frustration, false starts and delay, the Nigeria-Sao Tome and Principe Joint Ministerial Council will sign Production Sharing Contracts with a consortium led by Addax Petroleum and ERHC Energy this evening covering the much-coveted Block 4 of its Joint Development Zone.
Block 4 is said to have the potential to produce as much as 4 billion barrels of West Africa's sought-after light, sweet crude oil, a reservoir whose value at today's global market prices for crude exceeds $240 billion.
The signing of the contacts by Nigerian and Sao Tomean officials this evening at 1 p.m. EST (7 p.m. in Abuja) will bring to an end nearly three full years of acrimonious debate and controversy over the role of ERHC Energy, which helped Sao Tome create the Joint Development Zone several years ago, that had often threatened to leave the company's rights unperfected and worthless.
For For Sir Emeka Offor, the Nigerian businessman who owns 43 percent of ERHC Energy stock (OTC BB symbol: ERHE), it waill be a day of quiet and cautious celebration. According to a report last night from UpstreamOnline, Offor is in talks with Chevron about allowing them to gain a foothold in ERHC's share of Block 2. ChevronTexaco;s OBO-1 well in Block 1 has apparently struck a huge field near the Block 1/Block 2 border that extends far under ERHC Energy's side of the boundary line. Sources have said the PSC for Block 2 could be signed as early as next week.
Meanwhile, Offor must also conclude PSCs and Joint Operating Agreements with other players in Blocks 3, 5 and 6, and decide whether to partner with Sinopec, ChevronTexaco or even another suitor in Block 2.
But as to Block 4, where Anadarko and ExxonMobil had struggled mightily to wrest our 65 percent equity away, there is certainty at last: Now those priceless rights are ours.