Sao Tome seeks fresh talks with Nigeria on JDZ Blocks
Nigeria and Sao Tome share a joint offshore oil development zone but exploration results in the shared area have been disappointing.
Under the current deal, once oil starts flowing, Nigeria would receive 60 per cent of the oil receipts with Sao Tome and Principe taking the rest.
The head of the country’s state energy firm said in May ConocoPhillips, Chevron, Petrobras and Tullow were among eight international oil firms vying for the new exploration blocks.
Sao Tome, with oil deposits estimated at 10 billion barrel, which hopes to join the ranks of the region’s top energy producers in the next decade, has launched the bidding process for seven of its 19 exclusive oil blocks in March with bids due from oil companies in mid-September.
US companies Marathon and Murphy, as well as Germany’s RWE and India’s ONGC Videsh have also expressed interest in the blocks.
In April, Sao Tome Prime Minister Joaquim Rafael Branco, along with ANP officials, met with oil executives in Houston to discuss terms for the blocks with an eye toward incorporating feedback into the eventual contracts.
Sao Tome expects to become a commercial oil producer within eight years.
Nigeria, Equatorial Guinea, Cameroon and Gabon have all earned billions of dollars from development of their oil fields in the Gulf of Guinea.
French oil giant Total in July announced the signature of an agreement to acquire Chevron’s 45.9 percent interest in Block 1 in the JDZ.
Total said it will operate the block in partnership with Addax Petroleum JDZ 1 Limited, Dangote Energy Equity Resources and Sasol Exploration and Production Nigeria Limited.
The license, according to the company, extends over an area of close to 700 square kilometres in water depths ranging from 1,600 to 1,800 metres.