Sao Tome Oil Blocks to Be Awarded After Rights Decision

The joint development authority overseeing the award of nine offshore oil blocks shared between Nigeria and Sao Tome and Principe will not award rights until after two companies have exercised their preemptive rights on the area.

ExxonMobil and Environmental Remediation Holding, which is 48% owned by Nigeria-based Chrome Energy, will choose which blocks they want to take options on before the winners of the tender are announced, a JDA spokesman told Dow Jones Newswires by telephone from Abuja.

"The companies are going to get the blocks in which they want to exercise their rights to enable a final determination of the awards," the spokesman said.

ExxonMobil will be allowed to bid for any five blocks within 30 days from Dec. 30. ERHC will be allowed to bid for any three blocks within 15 days.

The two companies must match the highest bidder in any of the blocks.

The licensing round will be completed as soon as the rights are decided.

Both companies had signed earlier agreements with the Sao Tome government, which were renegotiated before the current tender round.

ChevronTexaco was the only oil major to bid in the licensing round, tabling a $123-million bid for Block 1, thought to be the most lucrative area in the joint development zone.

Analysts said ChevronTexaco is favorite to win a 70% stake in the Block.