American firm opens discussion on Nigeria-Sao Tome oil blocks
The company said in a statement on Monday that in addition to ERHC, the JDA has designated at least one new contractor on the Production Sharing Contract (PSC) in replacement of interest-holders that have terminated their interests in the block.
According to the company, it is expected that similar discussions regarding JDZ Blocks three and four will also commence in due course. It stated: “As earlier disclosed, the company has been reviewing its legacy exploration assets with a view to deciding, on an asset-by-asset basis, the feasibility and desirability of retention in the light of conditions in the oil industry and ERHC’s revised strategic focus.
“In the course of the review, the company has come to a conclusion regarding Block BDS 2008 in Chad. “After careful consideration, ERHC has elected not to apply for renewal of the Exclusive Exploration Authorisation and the Production Sharing Contract over Block BDS 2008 upon the expiration in April 2017, of the current term.”
ERHC stated that it would continue working toward a strategic realignment of the company in the light of the current oil-price environment, and continued constraints on funding for oil exploration activities.
It said that it is refocusing on opportunities for cost-efficient entry into production and producing assets. This, it noted is in contrast to the pure exploration model which the company previously ran and is intended to open up the company to new streams of investment and revenue.
“Accordingly, the company has concluded a Term Sheet with Starcrest Nigeria Energy Limited (Starcrest) pursuant to the Memorandum of Understanding earlier signed between the parties.
The Term Sheet sets out a 180-day period commencing May 1, 2017, for a definitive agreement between the parties that gives ERHC entry, for valuable consideration, into Starcrest’s current entitlements to production.
Starcrest has a significant stake in Elcrest Exploration and Production Company Limited, the holder of 45 per cent of Nigeria’s producing OML 40. Starcrest also holds directly OPL 291 and OPL 242 in Nigeria.
ERHC continues to bid, as part of several consortia with backing from financing partners, for producing interests in West Africa.Newstar Oil and Gas, Inc, a wholly owned subsidiary of ERHC, has also been set up to acquire producing assets domestically in the United States.