Nigeria, Sao-Tome And Principe Offer Oil Blocks To Total Oil Coy
Nigeria and Sao Tome and Principe on Thursday formally granted Total, a French international oil company, the exclusive right to begin exploration for crude oil in three blocks – 7, 8 and 11, located within the hydrocarbon-rich Joint Development Zone owned by both countries in the Gulf of Guinea.
Total was awarded the right to explore for oil in the JDZ blocks after negotiations were concluded and a Production Sharing Contract signed by the three parties involved in the deal.
The parties signed the PSC at a ceremony in Abuja on Thursday, where it was disclosed that the JDZ is an area in the Nigeria – São Tomé and Príncipe boundary speculated to be rich in oil and gas reserves.
Considering the fact that neither of the two countries could have explored the resources in the zone without interfering with their maritime rights, it was added that they agreed in a treaty to create a Joint Development Authority to develop the field and mutually benefit from its resources.
Parties to the deal then signed the JDZ in Abuja on February 21, 2001.
In his address at the PSC signing ceremony on Thursday, the Managing Director, Total Exploration and Production Nigeria, Nicholas Terraz, said his firm would invest more than $10m to acquire 3-dimensional seismic data of oil and gas prospects in the blocks.
According to him, it would be too early to estimate the hydrocarbon potential of the blocks, adding that more than 1,000 squares kilometres of the field would be explored.
He said, “This is for seismic acquisitions, and the investment is over $10m. It is too early to tell the quantity of the oil. We have a four-year exploration period and during which we will need to acquire the seismic data. Total will be funding 100 per cent for the time being.”
The Executive Director, Monitoring and Inspections at the JDA, Dr Ibiwari Jack, said while the potential of the oil blocks were unknown, Total’s exploration of same would provide partners with the details of the hydrocarbon content of the blocks.
He noted that the oil blocks assigned to Total had not been explored before now, and that the company would be the first to explore it.
“Having Total back to our JDZ gives us so much confidence. If others look back to see Total, they will want to come. The blocks they are into now, nobody has done any exploration there.
“They will go to do their seismic studies there and hopefully in the next one or two years, we will get to know the potential but the prospect is there, very huge,” said Ibiwari.
The Acting Chairman of the JDA, Dr Almajiri Geidam, stated that the signing of the PSC with Total was aimed at reviving activities at the JDZ after years of idleness.
Geidam noted that the JDA intended to also revive interests on the JDZ among investors and oil companies.
He said, “Since the JDA was established in January 2002, it has held two licensing rounds which culminated into the award of six blocks in the JDZ. Some exploration activity took place in most of the blocks that resulted in some discoveries of hydrocarbons.
“Today’s event, which is as a result of a careful re-engagement of the industry by the board, aimed at reviving the fortunes of the JDZ requires us to commend Total also for the renewed interest in the zone.”
He said the event was expected to elicit even more interest and confidence of other prospective investors as well as consolidate the existing cordial relationship between the Federal Republic Nigeria and the Democratic
Republic of Sao Tome and Principe.
“I wish to seize this opportunity to also reiterate the commitment of the board and members of staff of the JDA that we will work assiduously to ensure that the PSC signed today and indeed other existing PSCs are fully executed in accordance with the Abuja joint declaration on transparency and good governance signed by the two heads of state of the state parties,” Geidam added.