Thursday, August 17, 2006

No Rigs For Drilling JDZ Until Summer 2007, Dow Jones Says

There is little chance of finding an available rig to drill in Blocks 2, 3 and 4 until the middle of 2007, a Nigerian reporter for Dow Jones Newswires said today.

The article by Vincent Nwanma quoted unidentified officials of the Nigeria-Sao Tome and Principe Joint Development Authority, which manages the concessions in the Nigeria-DRSTP Joint Development Zone in the Gulf of Guinea.

Earlier, ERHC Energy partner Sinopec, the seventh-largest oil company in the world and China's second-largest, told media that it would probably not drill until Fall 2007, so the news is not news to most ERHC investors.

Here is the report:

Lack of Rigs May Delay Nigeria, Sao Tome Drilling
by Vincent Nwanma
Dow Jones Newswires
Wednesday, August 16, 2006

LAGOS Aug 16, 2006 (Dow Jones Newswires)

Drilling activities in oil blocks 2, 3 and 4 in the Joint Development Zone owned by Nigeria and Sao Tome may not get underway until the middle of 2007 because of a shortage of drilling rigs, a person familiar with the situation said Tuesday.

"All the companies are making arrangements to get rig slots," said the source at the Joint Development Authority, which oversees the joint development zone.

The three blocks were among five the JDA awarded in a mini bidding round in 2004. The other two are blocks 5 and 6.

Negotiations between the JDA and the winners of blocks 2, 3, and 4 were concluded early this year, while the winners paid $145.6 million last May for signature bonus for the blocks.

Revenue accruing from resources in the common maritime boundary between Nigeria and its island neighbor Sao Tome and Principe are shared in the ratio of 60:40, in favor of Nigeria.

The blocks are located in deep offshore, in the maritime boundary between Nigeria and its island neighbor.

"Rigs for deep offshore are limited because there is a high demand for them," said the source.

Regarding blocks 5 and 6, the source said the winning companies were making efforts to conclude their joint operating agreements as well as their negotiations with their technical partners.

Chevron JDZ Ltd. and its partners on the block 1 completed exploration on the first exploratory well in the joint development zone last March.

Chevron JDZ Ltd., owned by Chevron Corp. (CVX), has a 51% share in the block, while Esso Exploration and Production Nigeria-Sao Tome Ltd., a unit of Exxon Mobil Corp. (XOM), and Dangote Energy Equity Resources have 40% and 9%, respectively.

No comments: