Monday, March 27, 2006

Tillerson: Exxon Eyes West Africa Mother Lode; Dow Jones Concurs

An article in Forbes has described the rumored find in Block 1 of the Nigeria-Sao Tome and Principe Joint Development Zone as West African "mother lode," and the word may have come from CEO Rex Tillerson during an interview with the magazine, which attributed the information to the Agence France-Presse rewrite of a story in The Business that has been widely rewritten.

Company news about a deal with Abu Dhabi (no complaint about terrorists now?) precedes the generous mention.

Here is the Forbes article:

Faces In The News
Tillerson's Exxon Eyes Mother Lode In Africa
Greg Levine, 03.27.06, 10:47 AM ET

New York - Today, Rex W. Tillerson is the candyman. He's the chief executive of Exxon Mobil (nyse: XOM - news - people ), the gigantic integrated petroleum company--which had tantalizing news to report.

On Monday, Tillerson's colossus announced it struck a deal with the Abu Dhabi National Oil Co. (ADNOC) and that emirate's Supreme Petroleum Council (SPC) to buy a 28% stake in the Upper Zakum oil field. The presumably rich field is off the coast of U.S. ally United Arab Emirates.

ADNOC will retain a 60% interest in the field and Japan Oil Development will continue to hold the 12% balance.

Tillerson's firm said the U.S.-, UAE- and Japan-based companies will act via their joint operating company, Zakum Development, to up production by some 50%. The target is 750,000 barrels of oil per day. Exxon will support drilling operations, create a technology hub in Abu Dhabi and furnish personnel training. Dollar amounts were not disclosed.

And the Texas tea keeps flowin': Over the weekend, Tillerson's colossus and rival U.S. oil major Chevron (nyse: CVX - news - people ) may have struck a mother lode off the West African island state of Sao Tome and Principe.

According to the AFX newswire, preliminary drilling results indicate the offshore Obo-1 well may contain more than a billion barrels worth of oil and natural gas. Led by Chairman and CEO David O'Reilly, Chevron is the lead operator of the field with its 51% stake, while Exxon holds 40%. The balance is owned by Nigeria's Dangote Energy Equity Resources and Afren.

Tillerson's and O'Reilly's firms are slated to sit down on Tuesday to plot their course.

President George W. Bush recently said America has an oil monkey on its collective back. Monday's news makes it look like the U.S. can satisfy that petroleum jones for a while longer.

Dow Jones also released a story - like all the others based on The Business article, at the end of the trading day via its China wire:

DJ UK PRESS: Chevron, Exxon Eye Big African Oil Discovery

Monday, March 27, 2006
Dow Jones Chinese Financial Wire
Copyright (c) 2006, Dow Jones & Company, Inc.

LONDON (Dow Jones)--U.S.-based Chevron (CVX) and Exxon Mobil (XOM) have
made an African oil discovery that could hold more than a billion
barrels worth of oil and gas, the Business newspaper reports.

The find promises to be one of the largest this year off the shore of
the West African State of Sao Tome and Principe.

The Business quotes a source who has seen the drilling results completed
on March 15. 'It is an encouraging result. Everyone is pleased,' the
newspaper reports.

The source added that Chevron and Exxon will meet Tuesday to plan their
next moves.

Chevron and Exxon weren't immediately available for comment.

Newspaper Web site:

-London Bureau, Dow Jones Newswires; +44 (0)20 7842 9320

Disclosure: ERHC On The Move holds 300 shares of ExxonMobil and 300 shares of Chevron/Texaco, as well as 500 shares of Sinopec, which is in the adjoining block. In addition, a family trusts owns Chevron. I do not currently own ERHC Energy shares.

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