9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE DIARY OF THE NIGERIA – SÃO TOMÉ E PRÍNCIPE JOINT DEVELOPMENT ZONE Carlos B. Gomes ED Commercial & Investment and Chairman of the Board and Authority NIGERIA – SÃO TOMÉ E PRÍNCIPE JOINT DEVELOPMENT AUTHORITY NOT AN OFFICIAL UNCTAD RECORD

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE CONTENTS OF PRESENTATION  Joint Development Zone (JDZ) Key Dates  Joint Development Authority (JDA) Objectives  Summary of PSC Terms  1st JDZ Licensing Round 2003  2nd JDZ Licensing Round 2004  Future Opportunities

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE JDZ KEY DATES  December 1999: Official talks begin between Nigeria and São Tomé e Príncipe on competing territorial claims in the Gulf of Guinea  December 2000: Heads of State agree on the joint development of resources in the disputed area  February 2001: Joint Development Zone (JDZ) and Authority (JDA) created in a formal Treaty between the two States  January 2002: JDA inaugurated  April October 2003: 1st JDZ Licensing Round  October November 2004: 2nd JDZ Licensing Round  1 Feb 2005: Block 1 PSC signed

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE JDA OBJECTIVES  Realise the potential of the JDZ in a timely manner  Conduct licensing activity in a transparent, co-operative spirit  Understand the risk and reward balance required for investors  Design a fiscal regime that would:  generate early revenue for the JDA;  generate early payback for investors;  be flexible and fairly respond to changes in the economic environment such as high (or low) discovery sizes, prices or costs; and  be competitive with global fiscal regimes designed for deepwater operations, especially those in neighbouring areas  Listen to the opinions and concerns of potential investors  Be flexible throughout and amenable to reasonable requests

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE  Biddable signature bonus, production bonus and social projects  Minimum two well and Seismic data acquisition commitment over 8 years  Royalty (max. 5% rate; lower for small fields and fields in decline)  Calculation of Royalty, Cost Recovery and Profit Sharing on a field by field “ring fence” basis  Cost recovery ceiling of 80% of production after royalty  Unsuccessful E&A costs recoverable but must be depreciated as capital costs  Tax levied at 50% rate with 50% uplift on capital costs  Profit Sharing linked to post-tax field profitability (“R” Factor) SUMMARY OF PSC TERMS

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE JDZ PSC TERMS: FLOWCHART - Costs + Revenue+ Royalty Oil - Fees & Bonuses+ Fees & Bonuses + Cost Oil + Tax Oil + Profit Share ContractorJDA PSC

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE JDZ GOVERNMENT TAKE  JDZ Government Take in middle of range of global deepwater terms  Note: Government Take based on hypothetical 500 mmbbl field and excludes signature bonuses, if applicable

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE April 2003: Round opened June - Sept. 2003: Presentations and one-to-one meetings October 2003: Bids publicly opened in São Tomé April 2004: Block 1 awarded to a consortium led by ChevronTexaco (51%) and including ExxonMobil (40%) and Dangote - Energy Equity Resources (9%) July 2004: Block 1 PSC negotiations begin January 2005: Negotiating Round closed February 2005: Block 1 PSC signed Signature bonus = $123 million 1st JDZ LICENSING ROUND 2003

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE November 15th, 2004: Round opened with an offer of five (5) Blocks for competitive bidding December 15th, 2004: Bids publicly opened in JDA’s Headquarter in Abuja A total of twenty six (26) Bids were received from twenty two (22) companies for the five Blocks offered Bids were evaluated based on technical followed by commercial evaluating criteria as contained in the pre-announced 2004 Guidelines for Investors 2nd JDZ LICENSING ROUND 2004

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Highest Bona Fide Bids were retained as follows: –BLOCK $71 million –BLOCK $40 million –BLOCK $90 million –BLOCK $37 million –BLOCK $45 million –TOTAL FOR 2004 LIC. ROUND $283 million –TOTAL for 2003 & 2004 LR $406 million 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Based on a previous agreement with the Democratic Republic of Sao Tome and Principe, certain Pre-Emption rights were accorded to ExxonMobil and ERHC. ExxonMobil decided not to exercise their 25% optional rights (in any two blocks) under the current Licensing Round. ERHC rights are as folows: »BLOCK % »BLOCK % »BLOCK % »BLOCK % »BLOCK % 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Based on the principles established in the Guide Lines, a Due Diligence Report, Technical and Commercial Evaluation, JDA submitted to the JMC a Technical Report in December After several meetings the Joint Ministerial Council (JMC) awarded operatorship to the following Companies/Consortiums: BLOCK Devon/Pioneer/ERHC % BLOCK Anadarko % BLOCK Noble/ERHC % BLOCK ICC/OEOC % BLOCK Filtim/Huzo Oil/ DNO ASA/ EER/SINOPEC % 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Award as announced on May 31st is as follows: –BLOCK 2: Devon/Pioneer/ERHC – Operator – 35% ERHC Pre-awarded rights % Equator/ONGC Videsh % A. Hartman % Foby Engineering % Momo Oil/SOJITZ/IMMT/NISSHO -- 5% 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Award as announced on May 31st is as follows: –BLOCK 3: Anadarko – Operator % ERHC (pre-awarded rights) % DNO/EER % Equinox Oil/Petrochina % DEVON/ERHC % Ophir/BraodLink % 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Award as announced on May 31st is as follows: –BLOCK 4: NOBLE/ERHC ---- Operator % ERHC (pre-awarded rights) % CONOIL % HERCULES/CENTURION % Godsonic Oil & Gas % OVERT/ADDAX % 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Award as announced on May 31st is as follows: –BLOCK 5: ICC/OEOC Operator % ERHC (pre-awarded rights) % Sahara/Denham/Wood Group % 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE Award as announced on May 31st is as follows: –BLOCK 6: FILTIM/Huzod Oil/DNO ASA/EER/ SINOPEC Operator % ERHC (pre-awarded rights) % 2nd JDZ LICENSING ROUND 2004 (CONT.)

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE FUTURE OPPORTUNITIES  All JDA’s activities are based on Transparency and Accountability principles in line with the Abuja Declaration of June 2004  In line with those principles all revenues received from economic activities will be published and posted on our website  This unprecedented approach aims at attracting a wide spectrum of E&P Majors, Independents and Indigenous companies to the Zone  From a total of about thirty four (34) thousand square kilometers of total area, only five (5) thousand were affected under both Licensing Rounds  An area of over thirty (30) thousand square kilometers is still to be allocated  Although in deeper water depth, based on current trend of price scenario and technological advances, there are greater opportunities in the future.

9TH AFRICAN OIL & GAS TRADE AND FINANCE CONFERENCE, 2005, MAPUTO, MOZAMBIQUE CONCLUSIONS  Major exploration activity is about to begin, in an area once contested by two States, in less than 5 years from first dialogue on possible joint development  Achievement only possible because of the determination and flexibility of the two States  JDA has demonstrated transparency, efficiency and flexibility in its dealings with potential investors  Both JDA and investors have overcome some obstacles en route to achieving a potentially “win-win” scenario  JDA is looking forward to working with its new partners in a mutually beneficial collaboration that realises the full potential of the JDZ