Sao Tome and Principe: Four new oil blocks n joint exploration area with Nigeria to be auctioned as of 2011

22 May 2009

Lisbon, Portugal, 22 May – Sao Tome and Principe and Nigeria are expected as of 2011 to auction off four new oil blocks, which are smaller than those currently under prospection, the president of the Joint Development Authority (JDA) said.

Jorge Santos also said that the Authority that manages the Joint Development Zone was currently in negotiations with a specialised company that will carry out the necessary seismic surveys, but is considering awarding the contract to another entity.

The blocks in question are 7,8, 9 and 10, which are, “generally small, with areas between 750 and 1,500 square kilometres,” said the president of the JDA.

Block 1 was drilled in 2006 by US oil company Chevron, but the work did not detect commercially-viable oil.

After a three year period without any progress, work in the Joint Development Zone (JDZ) is due to begin again in June of this year in block 2, carried out by China’s Sinopec, and in block 4 in July, at the hands of operator Addax Petroleum, Santos said.

The issue of blocks 5 and 6, which were, respectively, awarded to ICCOOECA and Filtun Huzodo, has yet to be resolved as contracts for sharing production have yet to be signed.

Santos also said that the issue involves ERHC Energy, owned by Nigerian magnate Emeka Offor, who has interests in all of the JDZ oil blocks, except for number 1, and has 15 percent of blocks 5 and 6.

Offor’s company also claims 20 percent of block 9, which has yet to be auctioned off, and special rights even in Sao Tome’s Exclusive Economic Zone (EEZ), the auctioning process of which has yet to begin.

In the EEZ, “ERHC’s rights to take part in exploration and production activities include the right to receive up to two blocks of its choice and an option to buy 15 percent of exploration in another two blocks of its choice,” the company’s website says. (macauhub)