The Joint Development Zone (JDZ), shared by Nigeria and neighboring Sao Tome and Principe (STP), contains 23 exploration blocks and could potentially hold up to 14 billion barrels of Oil reserves.

Nigeria and Sao Tome have agreed to split revenues from the blocks on a 60:40 basis, respectively. Block One is currently the only block in the JDZ undergoing development. The block is controlled by Chevron (51 percent), with partners ExxonMobil (40 percent) and Equity Energy Resources (9 percent). If oil is located, Chevron plans to bring it onstream by 2010. Blocks Two through Six were also awarded, but due to disagreements between Sao Tome and Nigeria, approval of the PSAs has yet to occur.

Meanwhile, several independent U.S. based companies that were awarded shares in the blocks have relinquished their awards. Pioneer Natural Resources stated a failure to agree to specific terms of operation on Block Two as the reason for its withdrawal from the project. Pioneer’s withdrawal has opened the door for China’s oil and gas company, Sinopec, to invest in the JDZ. In February 2006, the Joint Ministerial Council (JMC) asked the Joint Development Authority (JDZ) to approve the remaining PSAs for the five blocks.

Development is also occurring in the waters surrounding the JDZ. In March 2005, Spinnaker Exploration (U.S.) purchased a 12.5 percent interest in Block OPL 256 from Ocean Energy, a subsidiary of Devon Energy. Drilling has commenced on the Tari 1 exploratory Well at Block OPL 256, which is located off the Nigerian coast near the JDZ. Three wells are planned for the block.

Source: Energy Information Administration