Sinopec and Addax Petroleum invest in oil prospecting in Sao Tome and Principe

12 March 2007

Sao Tome, Sao Tome and Principe, 12 March – Chinese oil company Sinopec and Addax of Switzerland estimate they will spend US$73.8 million on prospecting two oil blocs in the joint exploration area between Sao Tome and Principe and Nigeria, a representative of both companies said in Sao Tome Friday.

Jeff Schrull, made the investment estimate Friday in the capital of the archipelago, after signing a drilling contracting with India’s Aban Offshore and the Joint Nigeria Sao Tome and Principe Exploration Authority, which was presided over by Sao Tome oil minister, Manuel Deus Lima.

Schrull said that the prospecting process to be carried out by Aban Offshore, a company specializing in deepwater drilling, would essentially be the drilling of four wells between 2008 and 2013, in the two blocs, located in this area of the Gulf of Guinea.

The two companies will share the cost of the prospecting based on US$410,000 per day for each well, each of which will take and estimated 45 days.

In March 2006, Chinese state oil company Sinopec acquired the exploration rights to bloc 2 for US$71 million in signing bonuses, and is associated to other companies, such as Addax, which has a 14 percent share.

In the same round of sales of oil rights, organized by the Joint Authority for Development – Nigeria and Sao Tome and Principe, Addax was granted bloc 4 for US$90 million, with a minority stake owned by other companies.

The area also includes bloc 3, which was granted to US company Annadarko for US$40 million, with a minority share of 15 percent owned by Addax.

A few months ago, US oil company Chevron Texaco announced it had struck oil, as yet without any commercial guarantee, in a bloc located in the joint area between Sao Tome and Principe and Nigeria, the signing bonus of which cost US$123 million. (macauhub)