US companies lead in new Africa oil exploration

Several US oil companies, including a group led by ChevronTexaco, Devon, Pioneer, Noble, and Anadarko, have been awarded rights to develop oil resources in a Joint Development Zone (JDZ) controlled by Nigeria and Sao Tome.

Sao Tome is a poor island nation of 170,000 inhabitants with a history of political volatility which has never produced a drop of oil, while Nigeria is Africa’s biggest producer of oil.

The two nations have been attempting to put together the JDZ after settling an ongoing maritime dispute.

Besides the US oil companies that will participate in developing resources in the zone, Nigerian companies, including Filtim Huzod, Conoil, Hercules, and Dangote Energy Equity Resources, also received stakes in some of the awarded blocks, while US-based Environmental Remediations Holding Co (ERHO), which is run by a Nigerian, received stakes in all blocks due to rights it already holds.

The awarded blocks, located in the Gulf of Guinea, will be developed over the next seven years and are estimated to hold billions of gallons of oil. Three more blocks are scheduled to be awarded at a later date. It is expected that the US will fulfill a quarter of its oil needs from this area in the next 10 years.