Daily Independent (Lagos)
2 December 2008
ERHC Energy has dispatched notices of arbitration for service on the Joint Development Authority (JDA) and the governments of Nigeria and Sao Tome and Principe to commence arbitration in London.
The arbitration relates to ERHC's rights in Joint Development Zone (JDZ) Blocks 5 and 6.
No Production Sharing Contracts (PSCs) have been signed in either Block since working interests in the blocks were awarded in 2005 to several companies, including ERHC.
Following the exercise by ERHC of preferential rights in the Blocks as guaranteed by contractual and treaty arrangements by virtue of its exixtence in the area long before the 2001 treaty creating the zone, the company was awarded a 15 percent working interest in JDZ Blocks 5 and 6 in a 2005 bid/licensing round conducted by the Joint Development Authority (JDA), which is mandated to administer operations in the zone.
But, in a move to enforce its rights, ERHC instituted a legal action before the London Court of International Arbitration (LCIA) to clarify that ERHC's interests in JDZ Blocks 5 and 6 remain intact.
Earlier, ERHC filed a suit before an Abuja Federal High Court to ensure that no action contrary to ERHC interests was taken in both blocks pending the arbitration in London in the case.
Neither the notice of arbitration nor the lawsuit concerns any of ERHC's other interests in the JDZ and in the Sao Tome and Principe Exclusive Economic Zone (EEZ).
"We are hopeful that resolving this matter quickly and amicably will serve as the spark needed for all interested parties to finally make the long-awaited progress in Blocks 5 and 6," said ERHC Chief Operating Officer Peter Ntephe. "Our involvement in JDZ Blocks 2, 3 and 4 has affirmed our conviction on how well the process can work when operators have world-class expertise."
ERHC Energy Inc., a publicly traded American company with oil and gas assets in the highly prospective Gulf of Guinea off the coast of central West Africa, recently announced a resolution by a three-member LCIA tribunal to the arbitration with Addax Petroleum Corporation regarding a nine percent portion of Joint Development Zone (JDZ) Block 4.
Under the Participation Agreement between the parties no further consideration is payable by Addax Petroleum to ERHC for Addax Petroleum's 7.2 percent share of the nine percent. ERHC is entitled to the remaining 1.8 percent out of the nine percent.
The nine percent became available for distribution between ERHC and Addax Petroleum after it was recovered from another consortium partner that had failed to meet certain obligations.
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