3 November 2009
Sopuruchi Onwuka — Houston-based ERHC has declared intention to enter its concession to drill five oil wells in the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ) over the coming months after a lengthy delay caused by a shortage of deepwater rigs.
ERHC has a huge Nigerian interest. Sir, Emeka Offor, owns significant equity stake in the company which also has concessions in the Exclusive Economic Zone (EEZ) offshore Sao Tome and Principe.
It is one of the earliest companies to show presence in the zone highly advertised to hols significant prospects for hydrocarbon discovery but has not yielded any commercial find so far. Discovery by Chevron in the area was classified uncommercial, dampening investors' spirit in pumping further exploration funds in the region.
Plans by partners to drive a deepwater drilling campaign in the JDZ blocks were hampered by acute shortage and high cost of rigs in the past year when high oil prices triggered upbeat in rig activity around the world.
In block 2, in which ERHC has a 22 percent interest, China's Sinopec has begun drilling the Bomu-1 prospect with the Sedco-702 semisubmersible rig.
The company said it expects the rig to take about 45 days to drill the prospect.
Addax has also begun drilling the Kina prospect in block 4, in which ERHC has a 19.5 percent interest. Addax is using the Deepwater Pathfinder drill ship; ERHC expects drilling to take about 30 days.
The Deepwater Pathfinder will move from Kina in block 2 to drill the Lemba prospect in block 3 in late September or early October, ERHC said. Addax said last week it has acquired an additional 51 percent stake from Anadarko and will assume the operatorship of the block.
"We are working in what we expect to be a large oil field encompassing many prospects throughout the Joint Development Zone," ERHC said in a statement. "Whether one prospect proves to be a major or modest discovery is less important than what we learn about prospectivity throughout the wells being drilled."
Under the terms of a treaty signed in 2002, Nigeria, which is already Africa's largest oil producer, will take 60 percent of all oil and gas revenues. Sao Tome will take 40 percent.
Sinopec said August 18 it had completed the acquisition of Geneva-based Addax. The agreed C$8.27 billion ($7.22 billion) cash purchase -- part of its plans to target overseas reserves to secure future oil supplies -- marked the largest overseas takeover ever by a Chinese company.
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