Exxon Stakes N68.6b for JDZ Oil Block
Vanguard (Lagos)
February 17, 2004  

Hector Igbikiowubo, With Agency Report, Lagos 

US. oil giant ExxonMobil will take a 40 percent stake in a prime 
exploration block of Nigeria and Sao Tome and Principe's Joint 
Development Zone at a cost of some $49 million(about N68.60billion), to 
secure a foothold in the prolific acreage. The chairman of the JDZ, Taju 
Umar made the disclosure over the weekend, adding that he expects the 
much-delayed final allocation of JDZ exploration blocks, widely believed to 
hold billions of barrels of oil, to be announced by mid-March.Twenty oil 
companies posted bids last year for nine Gulf of Guinea blocks, to be 
managed jointly by the two countries and estimated to hold between six 
and 11 billion barrels of crude oil. The winners were expected to be 
unveiled in December or January.

But block allocation has been put on hold to allow Exxon, and Nigerian-
owned Chrome Energy, to exercise preferential rights over the acreage 
granted to reflect agreements made before the establishment of the 
JDZ."(ExxonMobil) have decided to take 40 percent in Block One," Umar 
said.It would be recalled that ExxonMobil had confirmed that it had 
exercised its right on the block on February 12, but did not comment on 
the dollar amount paid.Block One was the top pick in the bidding round, 
with ChevronTexaco offering a $123 million signature bonus for a 100 
percent of the licence.Umar said Exxon would pay a pro-rata proportion of 
the $123 million, or some $49 million, for 40 per cent stake in Block 
One."They will match that, for 40 percent," he said.Exxon still has an 
option to take up to 25 percent stakes in up to two more blocks.
Then Chrome Energy, also known as Environmental Remediation 
Holdings Corporation, has to say whether it will exercise options to buy 
stakes in up to six of the blocks.The preferential rights deals have been 
renegotiated several times, and criticised by rights groups, as well as by 
other potential investors.The Gulf of Guinea, where energy companies 
have already made several huge deepwater oil discoveries, is set to 
become an increasingly important source of oil for the United States as it 
seeks to reduce dependence on the turbulent Middle East.Nigeria is 
Africa's largest oil producer, while the tiny West African archipelago of Sao 
Tome and Principe will be the latest entrant into the sector.Umar said he 
expected a council of Nigerian and Sao Tome ministers to meet to decide 
the block allocations in the first week of March, and added that he 
expected an announcement regarding the allocations to be made in mid-
March.

Gambia strikes crude oil 
In a related development, a recent study has found oil in Gambia and the 
tiny West African state could soon become rich, President Yahya Jammeh 
said. "I am pleased to announce that oil has been discovered in the 
Gambia," Jammeh said in a televised address to the nation late on Friday. 
"The results of our findings are very promising. We have discovered oil 
both onshore and offshore. The country will be a rich nation soon," he 
said. Jammeh did not say which companies may be involved in the 
discovery, nor who had conducted the study. "Before the end of the year 
we will start experimenting at some of the discovered sites," he said.
With an annual per capita income of US$340, Gambia -- a sliver of land 
almost entirely surrounded by Senegal is one of the world's poorest 
countries. The former British colony's 1.25 million people survive on 
tourism, fishing and groundnuts. Nearby Mauritania, which is separated 
from Gambia by Senegal, is hoping to start exporting oil towards the end 
of next year. Jammeh said he wanted to rid his country of corruption in 
order to make good use of the hoped-for new oil wealth and told 
Gambians they should keep tending to their businesses as usual and not 
start dreaming about possible oil riches.

"You should not sit and fold your hands and say you are waiting for the oil. 
Don't say oil has been discovered in the Gambia and you will stop 
whatever work you have been doing. Farming and other working activities 
should continue," he said.