ABUJA — THE decision of the Joint Ministerial Council (JMC) of the Nigeria-Sao Tome Joint Development Zone (JDZ) to offer only four oil blocks in the zone in the next licensing round was as a result of a need to allow more data to be generated on the ultra deep blocks.
An official of the Joint Development Authority (JDA) said in Abuja, at the weekend that the decision was in the best interest of both Nigeria and Sao Tome for more seismic data on the blocks to be generated in order to maximize the exploitation of the hydrocarbon resources of the affected blocks.
The JDA had, in April 2003, put on offer blocks 1 to 9 under international competitive tender. That tender closed October 2003 and was followed by what has been described as “exhaustive evaluation of the bids” from which ChevronTexaco emerged winner of Block 1, (51 per cent), along with Exxon-Mobil (40 per cent) and Dangote-Energy Equity Resource (9 per cent).
At its 8th meeting in Abuja, at the weekend, the JMC approved the closure of the 2003 licensing round and directed the JDA, headed by Engr. Carlos Gomes, a Soa Tomean, to put four of the remaining eight blocks on offer in a fresh, accelerated exercise.
“JMC approved that the JDA officially announce the closure of the 2003 JDZ Licensing Round and directed them to make necessary arrangements to conduct another round with a view to awarding additional blocks within the next two months.
“The round will be conducted without prejudice to the rights already exercised by Environmental Remediation Holding Corporation (ERHC), and validated by the JDA, and the existing, remaining pre-emption rights of Exxon-Mobil..
“Council noted with satisfaction and commended the Joint Development Authority (JDA) negotiating team for the progress recorded in the Production Sharing Contract (PSC) negotiations and charged the JDA board to accelerate the process with a view to concluding negotiations before the end of the year.
“This will enable the generation of revenue that will assist the states parties in fulfilling the aspirations of their people,” the Minister of State for Foreign Affairs, Alh. Abubakar Tanko, had told the press at the end of the JMC meeting.
The three companies which won Block 1 have been meeting to formulate a Joint Operation Agreement (JOA) which would act as a road map to guide development of the block, the first in the first phase. The three companies are also expected to jointly pay the $123 million signature bonus on a pro-rata basis.
The companies have also been engaged in negotiations with officials of the JDA on the production sharing contract which would serve as the working document to guide the formula upon which oil produced from the block would be shared between them and the governments of Nigeria and Sao Tome.
The major players in the block (ChevronTexaco and ExxonMobil) are long-standing operators in the Nigerian oil industry and therefore well acquainted with guidelines on PSCs in the country, a situation which presidency officials said would greatly enhance on-going negotiations. ChevronTexaco will be operator in the block, located approximately 190 miles (300 kilometers) north of the city of Sao Tome in 5,700 feet (1,750 meters) of water.
ChevronTexaco’s Managing Director for its Nigeria/Mid-Africa business unit, Mr. Jay Pryor, said Block 1 represents “an exciting opportunity to explore a new and promising area” and expressed his company’s eagerness in finalizing all the necessary contract details quickly to enable his team commence exploration activities.
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