Environmental Remediation Holding Corporation has received notification from the Foreign Ministers of the Federal Republic of Nigeria and the Democratic Republic of Sao Tome & Principe that the Treaty between the two countries, establishing a Joint Development Zone over the offshore area that had previously been subject to competing national claims, has been ratified by all relevant governmental and parliamentary bodies in both countries and is immediately effective.
In consequence, the Memorandum Agreement executed May 21, 2001 between ERHC and DRSTP, under which ERHC has certain rights to be awarded working interests in licenses, and a share in signature bonuses and profit oil, and an over-riding royalty on production, has now become effective, the conditions of the Memorandum Agreement having been fulfilled. Upon the order of the consent award the terms of the Memorandum of Agreement shall entitle ERHC to the following:
- the option to acquire up to a 15% paid working interests in up to two (2) blocks of ERHC's choice in the JDZ;
- 100% working interests in up to two (2) blocks of ERHC's choice in the DRSTP's Exclusive Economic Zone (outside the JDZ) ("EEZ"), without payment of signature bonuses, after DRSTP reserves three (3) blocks; and
- the option to acquire up to a 15% paid working interests in an additional two (2) blocks of ERHC's choice in the DRSTP's EEZ.
- 5% of DRSTP's share of Signature Bonuses paid by companies operating within the JDZ (under the terms of the Treaty, DRSTP will receive 40% of the Joint Authority's share of Signature Bonuses paid by companies to acquire the right to enter into a production sharing contract); and
- 10% of DRSTP's share of Profit Oil received from operations conducted in the JDZ (under the terms of the Treaty, DRSTP will receive 40% of the Joint Authority's share of Profit Oil from production sharing contracts).
- 1.5% Overriding Royalty Interest in the gross production of crude oil and/or natural gas in the JDZ.
A ceremony was held in Abuja to inaugurate the JDZ and announce the formation of the Joint Authority to administer the JDZ. President and Head of State Olusegun Obasanjo of Nigeria and President Fradique de Menezes of DRSTP presided over the ceremony, which was also attended by Sir Emeka Offor, chairman of ERHC, and Mr. Chude Mba, president of ERHC.
Mr. Chude Mba said: "Now that the treaty has been ratified and the Joint Authority formed, we expect rapid progress towards the launch of the first licensing round in the JDZ, in which ERHC expects to play a significant role."