ERHC :-( - Sao Tome splits with U.S. oil company
SUNDAY, OCTOBER 03, 1999 9:55 AM
- AP WorldStream
SAO TOME, Sao Tome and Principe, Oct 03, 1999 (AP Worldstream via COMTEX) -- The government said Sunday it is dissolving an oil exploration partnership with U.S. company Environmental Remediation Holding Corp., alleging breach of contract.
The announcement came a day after company chairman Geoffrey Tirman told reporters in the West African archipelago the company would cease to invest in the country's oil project, as the government had broken the contract signed in May 1997.
ERHC, in conjunction with Mobil, entered a joint venture with the government, called STPETRO, to develop oil and gas reserves.
Government spokesman Pelegrino da Costa said the company had failed to pay the government a dlrs 5-million signing bonus for the oil exploration contract.
The company also failed to conduct a geological survey within 210 days of the contract signing, Da Costa said.
ERHC started offshore oil exploration in the country's territorial waters in July 1997 and announced last year it had found reserves.
Oil ministry officials said on condition of anonymity the company has so far invested dlrs 2 million in the former Portuguese colony.
Market analysts said the partnership apparently was dissolved after talks between company and government officials on oil production shares collapsed.
A company delegation, led by Tirman, left Sao Tome on Saturday after a week of talks.
Meanwhile, Da Costa told reporters the country's oil exploration project was not threatened by the split with ERCH, saying it would be pursued with Mobil and other partners, which he declined to identify.
Sao Tome and Principe lies in the Gulf of Guinea, about 240 kilometers (150 miles) west of Gabon -- one of the African continent's most active oil exploration areas.
The two-island archipelago reportedly has an oil production capacity of 500,000 barrels a day, with reserves expected to last 200 years.
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