JDZ Opens Bids for Sao Tome Blocks

Twenty-three oil companies have submitted thirty-three bids for nine offshore blocks in the Gulf of Guinea to be managed jointly by Nigeria and Sao Tome. ChevronTexaco made the largest offer.

A list of the bids drawn up by the Joint Development Authority (JDA) showed ChevronTexaco had offered a signature bonus of $123 million for a license for Block One, ahead of a $120 million bid for the same block by Nigeria's Conoil. The bids for the nine blocks, which the JDA estimates contain between six and 11 billion barrels of crude oil, were formally opened on Monday.

Some of the bidders included Statoil, Atlas Petroleum, Anadarko Petroleum and Fusion Oil and Gas. The final winners of the tender will be announced later this year.

The Joint Development Authority opened the licensing round earlier this year in April. It set a $30 million minimum signature fee, or down payment, per block. Under the Joint Development Zone rules, Nigeria will get 60 percent of the revenues and Sao Tome will get 40 percent.

Many of the 33 bids submitted came from smaller, less well-known companies. The JDA has granted preferential bidding rights to ExxonMobil and Chrome Energy Corporation -- in which Nigerian businesses have a significant stake. The two firms have option interests comprising around one quarter of the blocks.

An official at Sao Tome's Ministry of Natural Resources and Infrastructure said there was no guarantee the companies offering the highest signature bonuses will win the rights. "Signature bonuses are not even the main element," he said. "We need to know it is a good bona fide company, and it has made a good commercial proposal."