The authors also quote Addax Petroleum's Jean Calude Gandur at the end of the article on his cimpany's strong commitment to performance of the PSC conditions.
With the most coveted blocks now licensed and relatively little interest in the latter two blocks and the Sao Tome Exclusive Economic Zone looking like the next big prize to be won - ERHC Energy has rights to two full blocks there, bonus-free, and to a bonus-payable 15 percent of an additional block - the road map to an end to the licensing process would seem to encompass just a few more tedious pages.
ThisDay's story concerns the major investments ExxonMobil is once again promising to make - after being shot down in the JDZ and officially targeted by Ijaw militants in the Niger Delta for a "festival of carnage" after it refused to pay for an oil spill the company was allegedly responsible for - to assuage the Nigerian government's anger at its past behavior. The company had earlier dropped out of major projects it promised to undertake, apparently because it didn't get its way with Anadarko in Block 4 of the JDZ.
Exxon's $2 billion commitment to exploration and development was hailed by Dr. Daukoru as a step forward in the relationship between Nigeria and its multinational oil partners.
Here is the ThisDay Online story by veteran oil writers Mike Oduniyi and Onyebuchi Ezigbo:
ExxonMobil plans $2bn annual investment in Nigeria
Nigeria, Sao Tome to share $201m oil revenue
From Mike Oduniyi and Onyebuchi Ezigbo in Abuja, 03.15.2006
ExxonMobil has disclosed it would be investing over $2 billion (N258 billion), on an annual basis, in the exploration, development and production of oil and gas reserves in Nigeria.
Also, Nigeria and the Republic of Sao Tome and Principe are to share the sum of $201 million (N25.93 billion), being the signature bonus to be paid for three new oil licenses awarded to local and foreign companies yesterday.
The United States oil major yesterday said its plans to invest $2 billion annually in oil and gas exploration and production in Nigeria is geared towards achieving a production capacity of 1.0 million bpd by 2010.
This development was disclosed at the ongoing West Africa Offshore (OWA) conference in Abuja by the Deepwater Operations Manager of Esso Exploration and Production Nigeria Limited (a subsidiary of ExxonMobil), Mr. Jide Ayo-Vaughan.
Vaughan said that the investment was to ensure that ExxonMobil contributes substantially to meeting Nigerian government's goals of increasing oil production to 4.5 million barrels per day (bpd) and grow reserves to 40 billion barrels by 2010.
"Last year we established a vision for our upstream business in Nigeria, to grow and sustain gross operated liquid production to over 1 million bpd by 2010, and we are well on our way with an exciting year ahead of us," said Vaughan.
He listed projects on the card to achieving this target as including the $2 billion Erha deepwater field development that will produce 150,000 bpd, the Yoho offshore field expansion project and the East Area Additional Oil Recovery project.
Meanwhile, Nigeria and the Republic of Sao Tome and Principe are to share the sum of $201 million (N25.93 billion) being the signature bonus to be paid for three new oil licenses awarded to local and foreign companies yesterday.
The oil revenue to be shared by both Nigeria and Sao Tome, came from the award of three oil blocks 2, 3 and 4, located in the Joint Development Zone (JDZ) of the Gulf of Guinea.
Block 2 was awarded to China's Sinopec International Petroleum and the ERHC/Addax Petroleum consortium for a signature bonus of $71 million, while Block 3 was awarded to US oil firm, Anadarko (the operator of the block), along with ERHC Energy/Addax Petroleum consortium for a signature bonus of $40 million.
Block 4 went to the Addax/ERHC Energy consortium along with Conoil Producing, Overt Energy, Hercules Energy and Godson Energy, for a signature bonus of $90 million. The companies are to pay the amount within the next 30 days.
This brings to total, the sum of $324 million to be shared by Nigeria and Sao Tome from the award of oil licenses in the JDZ. US oil major Chevron and its partners in JDZ Block 1, ExxonMobil and Dangote-EER, had earlier paid $123 million for the block awarded in 2003.
According to the treaty signed by the two countries, Nigeria will get 60 percent of the revenue and Sao Tome, 40 percent.
Speaking at the signing of the Production Sharing Contract (PSC) agreements with the contractors in the two blocks, Nigeria's Minister of State for Petroleum Resources,
Dr. Edmund Daukoru commended the Joint Development Authority (JDA), the body administering hydrocarbon resources in the zone, officials of the two countries and the oil companies for ensuring that the agreements were finally concluded and signed.
According to Daukoru, concluding the award of the acreages had not come easily where at a point during the negotiations, US oil firm, Noble Energy, withdrew its operatorship of block 4, leading to ERHC Energy (in which local firm Chrome Energy has a major stake), signing a memorandum of understanding with Swiss firm, Addax Petroleum. "Negotiation of a PSC is by no means an easy task as it involves exhaustive and careful discussions to arrive at a consensus which all parties will have to abide for a very long time," said Daukoru. The signing of the PSC for the oil blocks had been shifted severally, the last being the botched attempt on February 28, 2006 with officials from Sao Tome demanding postponement for them to be able to further study the agreement.
He noted that already, the Joint Ministerial Council (JMC) has been directed to fast-track negotiations to ensure the signing of the PSCs for the remaining three blocks awarded along with Block 3 and 4 at the 2004 JDZ Licensing Round.
Chevron and its partners in Block 1, the minister said, are making steady progress in their drilling campaign which was commenced last January.
Speaking at the event, the Chief Executive Officer of Addax Petroleum, Mr. Jean Claude Gandur said that his company believed reserves in block 4 hold much promise, with potentials put at between 2 and 3 billion barrels of reserves.
"The block we have is one of the most prospective in the region. We promise as operator of block 4 to deliver as we have promised," said Gandur.
The Daily Indpendent of Nigeria has also written a story that suggests Blocks 5 and 6, which many investors thought ERHC would abandon to a re-bid, are going to be contracted for soon.
Here's the story by well-known oil writer Bassey Udo, along with colleagues Charles Okonji and Don Bassey:
Oil Blocs: Nigeria, Sao Tome Sign Pact
By Bassey Udo, Charles Okonji
and Don Bassey (Abuja)
Nigeria and Sao Tome and Principe have signed Production Sharing Contract (PSCs) in three oil blocs in the Joint Development Zone (JDZ), after several postponements caused by disagreement.
They were endorsed in blocs 2, 3 and 4 on Wednesday in Abuja.
China’s SINOPEC International Petroleum emerged operator of bloc 2, which has ER HC/Addax consortium, ONGC-EER and two Nigerian companies – Momo Petroleum and Fobi Engineering – as members.
The concession will attract a signature bonus of $71 million.
An American firm, Anardako Petroleum, will operate bloc 3 along with ERHC Energy/Addax Petroleum, EER-Ophir and Equinox Petroleum.
Addax Petroleum/ERHC Energy consortium has bloc 4 together with Conoil Producing, Ophir Energy, Hercules Energy and Godson Energy; for a signature bonus of $90 million.
The companies are to pay the amount in 30 days.
The two countries will split $324 million as revenue from the licence awards in line with the treaty which gives Nigeria 60 per cent of the amount and Sao Tome 40 per cent.
Minister of State for Petroleum, Edmund Daukoru, signed the deal on behalf of the government.
He said the signing of the contracts (the second in the JDZ after that of bloc 1 agreed in Sao Tome on February 1, 2005) would contribute significantly to the transition of the JDA from a planning phase to an execution phase.
Awarding of the acreages did not come easy.
At a point during the negotiations, Daukoru recounted, Noble Energy withdrew its operatorship of block 4, leading to ERHC Energy (in which local firm Chrome Energy has a major stake), singing a memorandum of understanding with Swiss firm Addax.
The signing of the PSC for the blocs had been shifted severally, the last attempt being on February 28 after which Sao Tomean officials demanded postponement to afford them time to study the details.
The treaty for the JDZ, signed on February 2001, provided the legal basis for the two countries to jointly develop the zone that is rich in petroleum and other natural resources.
Doukoru stressed that in the short existence of the JDA a lot of giant strides have been made, noting that Nigeria and Sao Tome have witnessed the “conduct of two licensing rounds. The first, held in 2003, led to the award of bloc 1 in which Chevron as the operator has 51 per cent equity. ExxonMobil has 40 per cent and the remaining nine per cent is held by Dangote-energy Equity Resources”.
Drilling of the first exploratory well – Obo 1 – in the JDZ began on January 14 and has been progressing steadily since then, he said.
Chairman of the board of Nigeria-Sao Tome and Principe JDA, Carlos Gomes, welcomed the parties to the signing, “one in the series of many more ceremonies that would take place in a few weeks, geared towards completing the PSCs for blocs 2-6.
"As contained in the PSC, the signature bonus is supposed to be paid within 30 days of the signing of the PSC. It is our sincere hope that this requirement and indeed other terms contained in the PSC will be complied with by the contractors to meet the aspirations and expectations of the states parties”.
Addax Chief Executive Officer, Jean Claude Gandur, said his company is convinced bloc 4 holds much promise in reserves, with potential estimated at between two and three billion barrels.
"The bloc we have is one of the most prospective in the region. We promise as operator of bloc 4 to deliver as we have promised”.
The ceremony came five years after President Olusegun Obasanjo and the President of Sao Tome and Principe, Fradique De Menezes, signed a treaty establishing the JDZ.
It is now four years since the establishment of the JDA, an area spanning 34,540 square kilometres in the oil-rich Gulf of Guinea, which corresponds to the overlapping Maritime Boundary claims of the two countries.
Both will have joint development and management of petroleum and other natural resources in their exclusive economic zone.
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