The French multinational oil and gas company, Total, has obtained the exclusive right to begin oil exploration in three blocks – 7, 8 and 11, which are located within the oil-rich Joint Development Zone (JDZ) owned by Nigeria and São Tomé and Principe.
The exclusive right was received after Total and the Nigeria-Sao Tome Joint Development Authority (JDA) signed a Production Sharing Contract (PSC) at a ceremony in Abuja, Nigeria, on Thursday, March 14, 2019.
Purpose of the JDZ alliance
Both countries formed the Joint Development Authority (JDA) in 2002 to manage the hydrocarbon and non-hydrocarbon resources in the maritime boundary of the two countries.
Why the deal matters
The Production Sharing Contract was signed to revive activities at the JDZ after years of idleness, the Acting Chairman of the JDA, Dr. Almajiri Geidam said. He added that the deal will revive investors’ and oil companies’ interests in the JDZ.
“Since the JDA was established in January 2002, it has held two licensing rounds which culminated into the award of six blocks in the JDZ.
“Some exploration activity took place in most of the blocks that resulted in some discoveries of hydrocarbons.
“Furthermore, this event is expected to elicit even more interest and confidence of other prospective investors.”
The deal is a confidence booster: The Executive Director, Monitoring and Inspections at the JDA, Dr. Ibiwari Jack said the deal with Total gives the management of JDZ some confidence that more companies would show interest. He added that the potentials of the oil blocks would be known within the next two years.
“Having Total back to our JDZ gives us so much confidence. If others look back to see Total, they will want to come.
“They will go to do their seismic studies there and hopefully in the next one or two years, we will get to know the potentials but the prospect is there, very huge.”
Meanwhile, Total Exploration and Production Nigeria (TEPN) intend to further invest to acquire 3-dimensional seismic data in the blocks, the Managing Director of TEPN, Nicholas Terraz, said at the PSC signing ceremony. But in Terraz’s opinion, it would be too early to estimate the hydrocarbon potentials of the blocks.
Terraz further disclosed that more than 1,000 squares kilometres of the field would be explored.