Carlos Gomes Tells 'ThisDay' He Expects Sao Tome To Approve Awards; Hints 'Oil Majors' Are Behind The Crisis; 'Punch': Awards This Week

Showing no signs of regret for the JDA's choice of bid winners in the Nigeria-Sao Tome and Principe Joint Development Authority's second licensing around, JDA chairman Carlos Gomes told ThisDay Online Monday that he expects Sao Tome to approve those choices when the JDA's Joint Ministerial Council meets again today in Abuja.

Another article, posted by Ruby1100 from the Nigerian daily Punch, says the JMC is expected to ratify the original awards before the end of the week (see below).

Gomes suggested that some disappointed "oil majors," such as ExxonMobil, were behind the crisis manufactured in Sao Tome:

"Although no local companies showed interest from Sao Tome, I think some people there may be protesting on behalf of some oil majors which they have interest in," he added.

Gomes talked Monday to the paper's Mike Oduniyi, a veteran reporter on the oil industry.

Oduniyi also reveals that Nigerian businessman Mike Adenuga's Conoil may be the winner of a 20 percent chunk of Block 4, where he would be partnered with Noble Energy and ERHC Energy, and possibly with Equator Exploration.

Protests Stall Award of Oil Blocks
by Mike Oduniyi
05.24.2005

The hitherto smooth administration of the Joint Development Zone (JDZ) of the Gulf of Guinea by Nigeria and Sao Tome and Principe has run into stormy waters as the two countries are now sharply divided over the award of oil acreages in the region to companies that participated in the 2004 licensing round.

At the heart of the disagreement is a loud protest by Sao Tome against the recommendations of the Joint Development Authority (JDA), the body administering the Zone, to allocate various equity interests in the five oil blocks on offer to Nigerian indigenous companies, including Conoil owned by Dr. Mike Adenuga.

THISDAY checks revealed that following the Sao Tomean protest, President Olusegun Obasanjo, who visited the tiny Archipelago Island last Friday, warned that the country was "politicking with purely technical matters."

The Joint Ministerial Council (JMC), the highest ruling organ in the Zone made up of 12 members drawn from the two countries, had met in Abuja late last month to deliberate on the recommendations of the JDA on the structure and composition of companies in the blocks namely 02, 03, 04, 05 and 06.

It was gathered that while Obasanjo had already approved the recommendations as presented by Nigeria's representatives on the JMC, his Sao Tomean counterpart, Fradique de Menezes, has withheld assent. This, THISDAY gathered, followed objections raised by that country's National Petroleum Agency, citing the preponderance of Nigerian indigenous companies holding "uncomfortable" equities in the oil blocks.

According to the complaint by the Sao Tome petroleum agency, most of the Nigerian local firms are connected in one way or the other to the Nigerian Presidency.

The agency cited for instance, allocation of 10 percent equity in Block 02 to A&Hartman, and 5 percent equity in block 04 to a company named Godsonic, both allegedly linked to Chief Tony Anenih. There are also allocations of 5 percent in Block 02 to Momo Oil and Gas as well as 10 percent shares in Block 03 to Equinox Oil and Gas, both linked to Mohammed Asibelua.

Adenuga's Conoil got 20 percent equity in Block 04 for which the company had submitted bids offering to pay $150 million signature bonus, when tenders were called late last year.

According to the position of the oil block allocation as presented by Nigeria's representatives in the JMC as at April 26, 2005, US-based Environmental Remedial Holding Company (ERHC), where Nigerian businessman, Emeka Offor's Chrome Energy holds 50 percent clinched 70 percent equity in the most promising Block 04 in partnership with Noble Oil Company.

ERHC, which exercised its preferential rights in the JDZ, used the rights to clinch equity interests in three of the five blocks put on offer. The other firm also with preferential rights in the Zone, ExxonMobil, declined last month to exercise its right.

Opposition from Sao Tome to this arrangement has been linked to the recent crisis that has rocked the country's government. First, President Menezes sacked his Oil Adviser, Patrice Trovoada, while the country's Minister of Natural Resources Arlindo Carvalho tendered his resignation last week, citing pressure over delays in awarding the JDZ Blocks.

Speaking in an exclusive interview on the matter, the Deputy Director Monitoring and Inspection of the JDA, Dr. Carlos Gomes, yesterday dismissed the claims by Sao Tome, adding that the Authority had followed clearly the rules laid down for guiding the 2004 Licensing Round of the JDZ.

Gomes listed the criteria, including:

• Companies with good, sound and solid foundation in oil exploration and production
  
• Need to diversify operatorship of the oil blocks, whereby no one company because of its strength (financial and technical) controls more than two blocks
  
• Offering opportunities to independent players, as against the presence of dominant oil majors, and
  
• Offering opportunities to local companies to own equities in the oil blocks.
  According to the JDA Chairman, while Nigerian indigenous companies participated in the bidding, none came from Sao Tome.

"The criteria are there, clearly stated, which we followed religiously. We have guidelines, which we published and we have followed. Any party in doubt can check them out," said Gomes.

"Although no local companies showed interest from Sao Tome, I think some people there may be protesting on behalf of some oil majors which they have interest in," he added.

The JMC meets again today in Abuja. According to Gomes, he expects Sao Tome to have approved the recommendation. "If they have observations they must state on what technical grounds. But if it has to do with political matters, then that is beyond us. The two Heads of State will have to deal with that."

The JDA was originally scheduled to announce winners of the five oil blocks namely 02, 03, 04, 05 and 06 last January. This was later postponed to April 2005 to enable the JDA conclude screening of the bids as well as allow ExxonMobil exercise its rights.

Under the JDZ arrangement, Nigeria's share of the reserves in the region put at 10 billion barrels of crude is 60 per cent and the remaining share of 40 per cent is held by Sao Tome and Principe.

Here is the article (with emphasis added) posted by Ruby11oo, a trusted poster, from Punch:

The Punch, Tuesday May 24, 2005

Nigeria, Sao Tome ministers meet on oil blocks winners
Michael Faloseyi

ABUJA -- The Joint Ministerial Council of the Nigeria, Sao Tome and Principe will reconvene in Abuja on Tuesday (today) to ratify the winners in the five oil blocks it placed on offer in the joint development zone.

Our source in the Joint Development Authority confirmed the meeting in Abuja on Tuesday when he said that the major agenda of the meeting would be clearing outstanding issues on the bids for the oil blocks.

While declining comments on the possible announcement of winners in the bids received for the five oil blocks that were placed on offer in December, the source said that the meeting would also address any other matter.

Media reports indicated last week that President Olusegun Obasanjo and his Sao Tome counterpart, Mr. Fradique des Menezes, have ratified the recommendations of the technical committee on winners in the bids.

It is, therefore, expected that the JMC will this week announced winners in the bid exercise at the end of its meeting.

The highest offer of $175 million was received on block four from ECL, one of the indigenous oil companies that participated in the bid exercise.

Another indigenous oil company, Conoil Producing Limited, placed $150 million on the same oil block that was the toast of most bidders.

Analysis of the bid received indicated that $135million from Vintage Oil and Gas was the highest bid placed on block two, while $41million by Energy Equity Resources was the highest received on block three.

A joint bid of $37million from ICC-OEOC was the highest bid placed on block five, while $45million was the only bid received on block six.

Meanwhile, the handling of the bids had sparked off reactions in the international community, a development that led to the resignation of three ministers in Sao Tome and Principe.