Nigeria, Sao Tome move to explore 500m barrels of oil.
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 the 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 in 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.