São Tomé and Príncipe

São Tomé and Príncipe 

 

CIA Factbook

Central Africa, islands in the Gulf of Guinea, just north of the Equator, west of Gabon

Mineral production is limited to clay and volcanic rock. All other mineral product requirements are imported

Indications of the existence of hydrocarbons in São Tomé and Príncipe were first noted in 1974, but attempts by the Portuguese Colonial Administration to sign a concession agreement with Ball & Collins North Sea consortium (a predecessor of Premier Oil of the United Kingdom) were abandoned following the country’s declaration of independence in 1975.

Other attempts to start petroleum exploration during the late 1980s and 1990s also failed. In 2003, Nigeria (60%) and São Tomé and Príncipe (40%) agreed to jointly operate an overlapping maritime boundary located about 200 km offshore Nigeria known as the Joint Development Zone (JDZ). Activities in the JDZ were to be overseen by the Joint Development Authority (JDADA). The JDZ was divided into nine blocks, and a licensing round was opened for bids in 2004, which resulted in the award of Block 1 to a consortium made up of Chevron Corporation of the United States (51%), Esso Exploration and Production Nigeria-Sao Tome (One) Ltd. (40%), and Dangote Energy Equity Resources Ltd. (a joint-venture of the Dangote Group of Nigeria and Energy Equity Resources AS of Norway) (9%).

The consortium signed a production-sharing agreement with the JDADA in 2005 and, in January 2006, began drilling activities within the block. In May 2006, the consortium announced that it had encountered hydrocarbons in the Obo-1 exploration well in Block 1 and that it was in the process of evaluating reservoir rock and liquid samples to determine the next step of the appraisal process. Block 1 is located about 300 km north of São Tomé and Príncipe and about 200 km south of the city of Port Harcourt in Nigeria.

Asecond licensing round for Blocks 2 through 6 was opened for bids in 2005. Energy Inc. of the United States (ERHC) won the rights to these blocks and, in March 2006, the company signed a series of production-sharing agreements with the JDADA and several petroleum and gas companies, among which were Addax Energy Nigeria Limited, Addax Petroleum (Nigeria offshore 2) Limited, Addax Petroleum Resources Nigeria Limited, Sinopec International Petroleum Exploration and Production Corporation Nigeria, and several other petroleum and gas companies whose names were not disclosed. Following inquires by the Petroleum Affairs Commission, the National Petroleum Council recognized deficiencies in the awarding process and ordered a formal investigation. The Attorney General, after concluding that the procedures used in selecting petroleum companies was flawed, recommended a restructuring of the procedures for future bidding rounds that would conform to international standards. The Attorney General’s report also called for the reexamination of ERHC’s preferential rights for Blocks 2, 3, 4, 5, and 6 within the JDZ.

Since 2006, there has been no word on any of the reexamination of ERHC's preferential rights and the countries of Sao Tome and Nigeria are moving forward with the exploration of the JDZ for oil. In or about July 2009 there were scheduled two oil rigs to start exploration and drilling of petroleum reserves within blocks 2-4 and ERHC is predominant in these blocks. With the possible acquisition of Addax Petroleum by Sinopec, and with the reports of Sinopec looking into acquiring ERHC, it is looking more like Sinopec will be the mainstay of the JDZ for Sao Tome and Nigeria in this area.

ERHC EnergyInc. Signs Memorandum of Understanding for Sao Tome and Principe Exclusive Economic Zone

HOUSTON, Dec. 16, 2014 (GLOBE NEWSWIRE) -- ERHC Energy Inc. (ERHE), a publicly traded American company with oil and gas assets in Sub-Saharan Africa, today announced the signing of a Memorandum of Understanding (MOU) with an International Operating Company ("IOC") related to Block 11 of the Sao Tome and Principe Exclusive Economic Zone (EEZ). ERHC currently holds 100 percent interest in the Block.

Under terms of the MOU, ERHC agreed to grant first right of refusal to the IOC for a farm-out of EEZ Block 11 for a period of six months. Under the terms of the MOU, ERHC will keep the identity of the potential partner confidential except and until a definitive farm-out is agreed on and entered into.

Until a definitive farm-out agreement is entered into and approved, ERHC continues to operate EEZ Block 11. The work program during the first four-year phase includes re-processing existing data, completing an aeromagnetic survey over the Block and acquiring 2,500 km of 2D seismic data.

EEZ Block 11 totals 8,941 square km, situated directly east of the island of Sao Tome and abuts the territorial waters of Gabon. ERHC's preliminary studies on currently available data indicate the possibility of a significant cretaceous play in Block 11 similar to the Jubilee Field offshore Ghana.

In addition to its oil and gas exploration interests in the EEZ, ERHC holds interests in the Republics of Kenya and Chad, and the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ).

About ERHC Energy

ERHC Energy Inc. is a Houston-based independent oil and gas company focused on growth through high impact exploration in Africa and the development of undeveloped and marginal oil and gas fields. ERHC is committed to creating and delivering significant value for its stockholders, investors and employees, and to sustainable and profitable growth through risk balanced smart exploration, cost efficient development and high margin production. For more information, visit www.erhc.com.