Daily Independent Online.
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Wednesday, June 30, 2004.
JDZ: JDA may begin contract negotiations
next month
By Bassey Udo,
Snr
Correspondent, Abuja
Negotiations for a
Production Sharing Contract (PSC) may begin next month between the Joint
Development Authority (JDA) of Sao Tome and Principe/Nigeria Joint Development
Zone (JDZ) and winners of the prime oil bloc one in the zone.
Chevron Nigeria
Limited, the Nigerian upstream subsidiary of the ChevronTexaco Corporation, was
awarded the operatorship of the bloc having emerged the preferred bidder with a
$123 million (N17.22 billion) offer. It is to operate the bloc along with
ExxonMobil and Equity Energy Resources (EER) at a percentage equity ratio of
51:40:9.
Presidency sources
said in Abuja on Tuesday that discussions have reached an advanced stage
towards the formulation of a Joint Operating Agreement (JOA) among the three
participating companies on the terms, guidelines and modalities of their
respective involvement in running operations to develop the prime bloc.
The JOA, the sources
said, would pave the way for the PSC negotiations some time in September to
determine the costs, royalties and fiscal regimes that would be involved in the
operation of the bloc.
Though the two
documents are to be modelled after the existing JOAs and PSCs with
multi-national oil companies operating in Nigeria, their provisions are to be
modified to accommodate the terms of the treaty between Nigeria and Sao Tome
and Principe on the Joint Development of Petroleum (JDP) and other resources in
the Exclusive Economic Zone (EEZ) of the two countries.
“The JDA is
monitoring discussions of the operating companies to ensure that the JOA does
not deviate from the provisions of the treaty. The final draft of the agreement
would be confirmed by the JDA after which the three companies would be given a
30-day moratorium to pay their signature bonuses pro-rata their respective
percentage equity in the award”, one of the sources said.
On the release of the
results for the remaining eight blocks in the zone, it was learnt that they may
have to wait till after the processes for the formal take-over of the awarded
bloc have been completed some time in December. The sources added that Nigeria
and Sao Tome and Principe would want to bide their time to ensure that the best
results are achieved.
Last week, the
President of Sao Tome, Fradique de Menezes, during a state visit to Nigeria,
commended the level of achievement recorded so far in the development of the
JDZ.
In his view, it is better for the two countries to take
their time and ensure that the best decisions are taken in their joint
interests, rather than rush to take make conclusions they would regret later.
