Monday, January 17, 2005

Dueling Dailies Debate Delays

Two competing Nigerian newspapers have published major articles on the upcoming announcement of winners of the second round of bids for the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ) oil and gas properties, with one paper predicting awards "anytime this week" and another saying that awards have "been put on hold."

The JDZ awards were originally scheduled for Dec. 31, but then delayed, the Nigerian oil minister Dr. Edmund Daukoru said last week, by the Christmas and New Year holidays. No Nigerian source, incluing Dr. Daukoru, has stated a specific date for the announcement.

The Guardian story is more likely to be accurate, although it seems to contradict assurances from Dr. Daukoru, who told the News Agency of Nigeria and This Day last week that the awards would be announced at the end of January.

The awards announcement process may have been kick-started last week by the personal intervention of President Obasanjo, who reportedly interrupted negotiations for one block to add urgency to the negotiations and described the fits and starts of the process as "unprofessional."

The daily Guardian, one of the country's best newspapers, reported that:

Meanwhile, the Nigeria-Sao Tome and Principe Joint Development Authority (JDA) has invited some companies to review their bids in the last bidding round for final award of licenses.

The JDA had in December put five blocks on offer where 26 companies including some indigenous ones submitted bids. Sources in the industry told the News Agency of Nigeria (NAN) yesterday in Abuja that the move was part of efforts to ascertain the capabilities of the companies in offshore deep waters.

Some of the companies invited are in partnership with reputable organisations with immense offshore deep water experience," the source said.

It was learnt that the JDA would announce winners of the five blocks anytime this week.

Companies that participated in the bidding round are bracing up for the award of the licenses, which will kick-start oil exploration at the JDA. The JDA remains upbeat with activities this week, as oil company executives were seen last-minute discussions prior to announcement of the winners.

Daukoru said most of the Nigerian companies that participated in the bidding did not have deep-water experience, but the JDA would consider them seriously.

He said the move would further domicile local content in the upstream sector of the oil industry.

Of the 26 companies that participated in the exercise, only few American companies really have offshore deep-water experience. Such companies include Anardako, ECI and ERHC.

The article is at http://www.guardiannewsngr.com/news/article03.

Of those American companies named, Anadarko is an Oklahoma-based deep water driller with a rich history, but it recently reduced its worldwide exploration budget substantially and has reportedly pleaded with the JDA to be allowed to pay their signature bonus over time if they are awarded an operatorship, a plea the JDA directly rebuffed.

The third company, ECI, is misidentified. The bidder was ECL International, an Anglo-Australian oil services firm.

Gentlemen, Review Your Bids

It may be critical for investors to understand the meaning of the phrase about the JDA having "invited some companies to review their bids." That is presumably an invitation to some bidders to raise their bids to win blocks.

"Reviewing" that bid would likely mean increasing it to better Anardarko's and thereby win the block. Without knowing how many of the bids opened on Dec. 15 would be raised in such a post-facto competition, it would also be difficult to calculate where or when that process might end or its impact on profitability.

In block 4, for instance, only $1 million separated the bids of Anadarko and ERHC and a third bidder. Noble Drilling is paired with ERHC in that block, and has promised to fast-track three wells within a year.

That is probably the subtext of the sentences that include the words, "only few American companies really have offshore deep-water experience. Such companies include Anardako, ECI and ERHC." ERHC is neither a driller nor an exploration company, but its partners in bids for Blocks 2, 3 and 4, Pioneer Natural Resources and Devon Energy in the first two and Noble Drilling in the third, have wide experience.

Meanwhile, This Day, whose reporting tends to be heavily tinged by opposition politics and its reporter's apparent fondness for Conoil, an indigenous oil producer, said:


The much anticipated award of five oil blocks in the Joint Development Zone (JDZ) of the Gulf of Guinea, has been put on hold following disagreement between Nigeria and Sao Tome and Principe over performances of prospective companies seeking the oil licenses.
Going by the time table outlined by the Joint Development Authority (JDA), the body managing hydrocarbon resources within the zone in the Gulf of Guinea, winners of licenses to the oil blocks named 02, 03, 04, 05 and 06, were scheduled to be announced last weekened.
THISDAY checks, however, revealed that disagreement over signature bonuses to be paid by winners for the blocks, caused the row between the two countries.

It was gathered that while Sao Tome, which is entitled to 40 percent of the proceeds from the sale of the blocks, insist on favouring companies that offered higher money, Nigeria sought to lay more emphasis on technical competence and more importantly, local content advantage in the work programmes submitted.

"There was some slight disagreement between Nigeria and Sao Tome over signature bonus and other issues, although it has been resolved now," said a JDA source.

Nigerian indigenous oil production firm, Conoil, led the pack of local firms seeking to grab one or two of the licenses, offering to pay a signature bonus of $150 million (N20 billion) for Block 04.

The This Day article can be found at http://www.thisdayonline.com/nview.php?id=7163.

Some Erratic Reporting

Nigerian newspapers vary wildly in style and intent. Some are the political organs of major parties, while others are far more professional in both reporting and content.

On a regular basis, ERHC On The Move visits, in no particular order, This Day, The Guardian, Daily Independent, Daily Champion, New Age, The Sun, Vanguard and Financial Standard.

In addition, the Newswatch magazine site has many articles that discuss ERHC chairman Sir Emeka Offor, including a profile of him that ran in 2003. (See the "Comments" section below this article for a list of the 10 most recent stories.)

None of these publications provide any in-depth, daily or even frequent coverage of the country's involvement in the Joint Development Zone, and many of articles are heavily slanted towards or against the government of President and Petroleum Minister Olusegun Obasanjo or particular oil companies.The Guardian, however, makes the best effort.

This Day's Mike Oduniyi, in particular, seems to be antagonistic towards ERHC and positive towards Conoil.

By far, the best source for information about the awards has been the aggregate news site, http://www.allafrica.com, which provides links to all the major daily news Websites on the African continent, and provides a comprehensive search engine free to all users.

Donations to All Africa are accepted, and help the site aid the Continent-wide fights again AIDS and other diseases that cripple so much of Africa's population. Unfortunately, the two current article cite here do not yet show up in a search of the allAfrica site.

Disclosure: I have been a contributor to USAfricaOnline.com, a site that is decidedly anti-Obasanjo, and whose editor is a former highly-placed official of the Nigerian National Petroleum Corp. was introduced to me by the U.S. Department of State when he and other African journalists visited my home in Hollywood, Calif.


12 comments:

Anonymous said...

Search string: "Emeka" "Offor"
Capital and small letters case-insensitive, Accept also parts of a word
Searched sources: title, full text
Required time: 14.3 s
Results:
468 Files from 6 685 (144 526.5 KB) found
with 1 144 total matches ("Emeka": ; "Offor": )
Files 1 - 10
1. Dirty Deals
http://www.newswatchngr.com/editorial/prime/2002/18022002/cover10216094418.htm (69 KB)
69 matches; Updated on July 22, 2003
Despite petitions alleging illegal transfer of $186 million out and back into Nigeria, federal authorities are yet to investigate. Is this another mortal blow to President Obasanjo’s transparency and accountability campaign?
2. It’s Blackmail
http://www.newswatchngr.com/editorial/prime/2002/18022002/cover10216094838.htm (46 KB)
43 matches; Updated on July 22, 2003
Group Captain Nnamdi Nnoruka, Offor’s cousin and associate talks to Maureen Chigbo, associate editor and Favour Okereke, reporter/researcher on the allegations against Offor
3. I Will Flush Out Mbadinuju
http://www.newswatchngr.com/editorial/prime/2001/06082001/cover10804231934.htm (57 KB)
40 matches; Updated on July 22, 2003
Emeka Offor, businessman and financier of Anambra People’s Forum, APF, explains why he is at the forefront of the campaign to remove Governor Chinwoke Mbadinuju of Anambra State. He spoke with Jossy Nkwocha, general editor and Tobs Agbaegbu,...
4. War with Godfathers
http://www.newswatchngr.com/editorial/prime/2001/07052001/cover10508160953.htm (56 KB)
28 matches; Updated on July 22, 2003
Some of them helped pave his way to the highest political office in Anambra State, funding his gubernatorial campaign. Now prominent politicians from Anambra State take on their state governor Chinwoke Mbadinuju. Can he survive this latest battle...
5. Profile: Emeka Offor:
http://www.newswatchngr.com/editorial/prime/2001/06082001/cover10804231631.htm (25 KB)
27 matches; Updated on July 22, 2003
Is this wealthy businessman really a power broker in local and national politics in Nigeria?
6. My Opponents Will be Crushed
http://www.newswatchngr.com/editorial/prime/2001/07052001/cover10508161551.htm (55 KB)
24 matches; Updated on July 22, 2003
Chinwoke Mbadinuju, governor of Anambra State speaks to Tobs Agbaegbu, associate editor, on Bakassi Boys, political opponents
7. Letters
http://www.newswatchngr.com/editorial/prime/2001/17092001/fob10914152531.htm (24 KB)
20 matches; Updated on July 22, 2003
January 15, 2003 Advertisement / Subscription / Feedback / About Us / Editorial Suite Nigeria World Business+Economy Special Reports Back of the Book People in the News Letters Column Letters Ugly Trend in Politics The power tussle in Anambra State...
8. Taste of our Pudding
http://www.newswatchngr.com/editorial/prime/2001/25062001/sr10626102744.htm (66 KB)
17 matches; Updated on July 22, 2003
Chinwoke Mbadinuju, governor of Anambra State, in a no holds bar interview spoke to Ray Ekpu, chief executive officer, Dan Agbese, editor-in-chief, Maureen Chigbo, associate editor on critical issues affecting the state
9. My Enemies at Work
http://www.newswatchngr.com/editorial/prime/2002/04032002/ng10303194107.htm (23 KB)
17 matches; Updated on July 22, 2003
Emeka Offor denies dirty deals, maintains Newswatch report on an alleged cover-up was the handwork of his enemies
10. No Hiding Place for Mbadinuju
http://www.newswatchngr.com/editorial/prime/2003/17022003/sr10216110936.htm (44 KB)
14 matches; Updated on July 22, 2003
Anambra branch of the Nigerian Bar Association vows to ensure he pays dearly for his “sins.” Even his party makes sure he is not re-nominated to run for a second term

M6 said...

Your opine seems to be misleading. Yes, there was a glitch in the negotiations but, according to the article you reference, the issues were resolved.


"There was some slight disagreement between Nigeria and Sao Tome over signature bonus and other issues, although it has been resolved now, said a JDA source."Looks like it's awards by Jan.31 and onwards to a new round and its completion by mid this year.

Anonymous said...

Joe I assume you are aware that an intelligent person can pretty easily read between the lines of your articles and know who you talk to and what is going on.
I don't have a problem with it. In fact, it's very helpful.

Anonymous said...

My opinion was misleading? I said the Guardian article was more likely to be accurate. The Guardian said the awards might come "anytime this week." Please read more carefully.

Anonymous said...

Joe I think it would be easier for you to come up with two headlines for each and every story from now on.
One headline says JOE SAYS GOOD NEWS.
The other headline says JOE SAYS NOT GOOD NEWS.

This would make it so much easier for the average reader. He could just skip reading the article and get an immediate understanding of the simple issues. He would not have to interpret things for himself and could either love you or hate you based upon what someone else is saying in Africa. Just an idea... :)

...Joe Shea said...

My favorite headline would be: JOE TELLS BOTHS SIDES OF THE STORY so investors are fully informed... :) Thanks for your comment.

tradertrades said...

Fully informed? There is no such thing as fully informed.

...Joe Shea said...

Well, just til your brain bursts, then....

tradertrades said...

Joe, your brain must have already burst. Please get the fact on block 4 right.

...Joe Shea said...

What did you find in error regarding Block 4, tradertrades?

tradertrades said...

Block 3 and 4 are intermingled in this:

"In block 4, for instance, only $1 million separated the bids of Anadarko and ERHC and a third bidder. Noble Drilling is paired with ERHC in that block, and has promised to fast-track three wells within a year."

...Joe Shea said...

Trader, the third bidder is this ECI or ECL, depending on who you believe. The tiop ost on this page addresses that issue. I am speaking of Anadarko's Block 4 bid.