Nigeria/Sao Tome aim for new oil deals by end '05
Tue Jun 21, 2005 03:27 PM ET
By Simon Webb
LONDON, June 21 (Reuters) - Nigeria and Sao Tome are aiming to sign five new oil exploration contracts with operators in shared offshore waters by the end of the year, the chairman of the zone's oil administration authority said on Tuesday.
The contracts would allow the winners of the second Nigeria-Sao Tome licensing round to begin drilling exploration wells.
"We hope to have these agreements signed by the end of the year," Carlos Gomes, chairman of the Nigeria and Sao Tome Joint Development Authority, told Reuters on the sidelines of a West African oil and gas conference.
Signing contracts by the end of 2005 would mark a significant reduction in the negotiation time to less than seven months for a contract following the award of an exploration license.
The JDA awarded its first exloration license to a Chevron-led (CVX.N: Quote, Profile, Research) consortium in October 2003, but it did not sign an exploration contract with Chevron until February this year, nearly 18 months later.
Lengthy negotiations over contract details delayed the signing.
A Chevron source involved in the first round of negotiations said the accelerated time scale for the second round was plausible as the JDA would be more familiar with the process after thrashing out the details with Chevron.
"I think they should get these contracts signed more quickly," the Chevron source said.
Companies that won the rights to exploration blocks in the second licensing round in May include ERHC Energy (ERHE.OB: Quote, Profile, Research) , Devon (DEV.N: Quote, Profile, Research) , Noble and Anadarko (APC.N: Quote, Profile, Research) .
The JDA has formally notified companies of their award and the percentage equity share in the blocks this week and companies have two weeks to accept the notification, Gomes said.
The waters are in the Gulf of Guinea, one of the world's exploration hotspots due to several major deepwater oil discoveries in the last 10 years. Big discoveries have been made in Nigerian and Angolan deepwater.
The region is one of the key drivers of global oil supply growth. The United States, the world's largest oil consumer, hopes to import a quarter of its oil from the Gulf of Guinea region in a decade, up from 14 percent now.
The Nigeria-Sao Tome Joint Development Zone was established in 2000 in the previously disputed offshore area. Under the agreement, Nigeria receives 60 percent of revenues while Sao Tome receives 40 percent