Abuja — A new production sharing contract (PSC) yesterday entered into by Nigeria, Sao Tome and Principe Joint Development Authority (JDA) and Total Nigeria Plc is to exploit over 500 million untapped barrels of crude oil in West Africa.
Coming 18 years after an earlier treaty was struck, Total and major stakeholders from the two nations as well as the managers of the zone, citing changing technology and experience, were upbeat about the development.
Indeed, the oil major is staking $10 million in exploration of three oil blocks (seven, eight and 11) in the zone, the acting chairman of JDA, Dr. Almajiri Geidam, disclosed at the signing ceremony in Abuja.
The Joint Development Zone (JDZ), managed by the authority, is an area bordering the two countries to the fringes of the Atlantic Ocean that is rich oil and gas reserves.
Because neither nation could have explored the resources in the zone without interfering with the maritime territory of the other, both agreed in a pact to create the JDA sited in Abuja for the benefit of the duo.
The two West African giants in 2001 sanctioned the zone to manage and exploit the untapped petroleum and other natural resources therein.
Geidam said the new pact follows a careful re-engagement geared at turning around the fortunes of the region.
According to him, the development would elicit interest and confidence of investors as well as consolidate the existing cordial relationship between the two countries.
He said: "We will work assiduously to ensure that the PSC signed today (yesterday) and indeed other existing PSCs are fully executed in accordance with the Abuja Joint Declaration on Transparency and Good Governance signed by the two heads of state."
The Managing Director of Total E&P Nigeria Limited, Nicholas Terraz, said though the firm had pulled out of previous deals, it would, however, explore the opportunity of the 3D seismic data to assess drilling potential in the area.
Meanwhile, the Organisation of Petroleum Exporting Countries (OPEC) may continue with its output cuts beyond June to stabilise price.
In a monthly report released yesterday, the cartel reduced the forecast of global oil demand, as United States threatened another glut.
Last month, while increasing output forecast for non-OPEC members by 80,000bpd to 2.18mbpd on the backdrop of production statistics from U.S. Gulf of Mexico, the organisation had equally lowered its demand, citing global economic realities.
It noted that the 2019 demand for crude oil would average 30.46mbdp.
Besides, the United States Secretary of Energy, Rick Perry, yesterday said his country was committed to helping Africa achieve energy independence.
Speaking with continental petroleum ministers on the sidelines of the 19th CERAWeek Conference in Houston, Texas, he stated: "For our part, we will support progress by engaging economically as well as championing open markets in societies. We endorse the modernisation of critical oil and gas infrastructure which lead to better security and diversification of energy supplies and exports."
Describing innovation as the surest path to energy security, Perry noted that once countries innovate, they are greeted with greater economic growth, opportunities and national security.
Perry said as the number one producer of oil and natural gas in the world, the U.S. was more than well-positioned to not only share its resources but also its technology and know-how.
Similarly, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, called for integration among countries within the West Africa sub-region to provide lasting solutions to the its numerous energy challenges.
A statement by the corporation's Group General Manager, Group Public Affairs Division, Ndu Ughamalu said the appeal was necessary to reduce unemployment and restiveness as well as improve the economies of the nations in the bloc.