More than two decades after international oil majors walked away from the Nigeria–São Tomé and Príncipe Joint Development Zone (JDZ), the two countries are making a fresh push to attract investors to one of the Gulf of Guinea’s most tantalising but persistently underexplored hydrocarbon frontiers.
The Joint Development Authority (JDA) is offering improved fiscal incentives — including lower signature bonuses and reduced regulatory requirements — to entice independent producers, particularly Nigerian companies, to pursue exploration in the 34,540 square kilometre ultra-deepwater acreage.
Acting JDA Chairman Mohammed Ibrahim recalled that a 2003–2007 licensing round generated $123 million in signature bonuses and led to a 270 million barrel oil discovery in 2006 — but the find was deemed commercially marginal, prompting an exodus of international oil companies including Chevron, Texaco, and Total.
“Obo 1 has a discovery of between 50 to 100 million barrels. It has to be much more than that to make economic sense for an IOC to go there and carry out exploration and production activities,” Ibrahim explained. The JDZ operates under a 60:40 Nigeria–São Tomé resource-sharing arrangement established by a 2001 treaty, with Production Sharing Contracts governing commercial activities. Ibrahim is now calling on local companies to “take ownership” of exploration in the highly untapped basin.
Source: thisdaylive.com