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Offshore

Offshore staff

(West Africa) - The Nigeria-Sao Tome and Principe Joint Development Zone has earned the sum of $271 million in signature bonuses to be paid for new oil licenses awarded to local and foreign companies.

ExxonMobil revealed plans to invest on annual basis $2 billion in oil and gas E&P in Nigeria toward achieving a production capacity of 1 MMb/d by 2010.

The oil revenue to be shared by both countries came from the award of oil blocks 2, 3, and 4 in the JDZ, located in the Gulf of Guinea.

Sinopec and Addax/ERHC Energy posting a signature bonus of $71 million for block 2.

It is expected that Sinopec will operate block 2.

Anadarko alongside the ERHC Energy/Addax Petroleum consortium is operator for block 3 after posting a signature bonus of $40 million.

Block 4 went to the Addax/ERHC Energy consortium, along with Conoil Producing, Overt Energy, Hercules Energy, and Godson Energy, for a signature bonus of $90 million.

The companies involved are expected to pay the signature bonuses within the next 30 days.

This brings to $324 million the total sum of money to be shared by both countries from the award of oil licenses in the JDZ.

Chevron and its partners in JDZ Block 1, ExxonMobil and Dangote-EER, had earlier paid $123 million for the block awarded in 2003.

The provision of the treaty signed by the two countries indicates that Nigeria will get 60% of the revenue and Sao Tome, 40%.

While speaking at the signing of the production sharing contract agreements, Dr. Edmund Daukoru, Nigeria's Minister of State for Petroleum Resources, said concluding the award of the acreage had not come easily.

He said that at a point during the negotiations, Noble Energy withdrew its operatorship of block 4, leading to ERHC Energy signing a memorandum of understanding with Addax Petroleum.

"Negotiation of a PSC is by no means an easy task, as it involves exhaustive and careful discussions to arrive at a consensus which all parties will have to abide by for a very long time," he said.

The signing of the PSC had been shifted several times, the last glitch occurring on Feb. 28, 2006 with officials from Sao Tome demanding postponement for further review of the agreement.

Daukoru noted that the Joint Ministerial Council has been directed to fasttrack negotiations to ensure the signing of the PSCs for the remaining three blocks awarded along with blocks 3 and 4 at the 2004 JDZ licensing round.

03/20/06