Saturday, August 06, 2005

Block 2 PSC Set For Oct. 7 Approval

The oil industry trade journal UpstreamOnline in Friday's edition provided the mutually-agreed-upon dates for conclusion of the Production Sharing Contracts that will govern the dealings of the Nigeria-Sao Tome and Principe Joint Development Authority with the winning bidders of five blocks in the 2005 licensing round.

ERHC Energy won concessions in all five blocks, including operatorships on the two most hotly-contested blocks, No. 2 and No. 4, with partners Pioneer Natural Resources and Noble Energy, respectively. The PSCs for all five will be approved in October, the newspaper said.

Although it appears unlikely, many investors have hoped aloud on ERHE message boards that signing the contracts and the related Joint Operating Agreements will lift ERHC's dismal share price, which closed at $0.395 on Friday after trading in a $0.025 range on low volume all week.

Here is the UpstreamOnline story by prize-winning oil reporter Barry Morgan:

Deadline agreed for end to talks on JDA contracts
The Abuja-based Nigeria-Sao Tome Joint Development Authority (JDA)managing the current deep-water licensing round in the Gulf of Guinea has agreed a timetable to conclude production sharing contract talks by 11 October, writes Barry Morgan.

Meetings took place late last week during which oil companies demanded more time to review the JDA's draft contract.

Oil company negotiators will convene again in Abuja on 25 August and not two weeks earlier as previously targeted.

In addition, they will have to submit their comments by 18 August.

Final comments from the companies will be solicited on 16 September after initial talks, and the final version will be hammered out and approved by the Joint Ministerial Council by 29 September along with all the joint operating agreements.

The draft document applied to blocks 2, 3, 4, 5 and 6 is understood to be based on Chevron's PSC, which has already been awarded for Block-1 in the Joint Development Zone.

It is envisaged that the PSC for Block 2 will be approved on 7 October.

Block 3 will be approved on 8 October, Block 4 on 9 October, Block 5 on 10 October and Block 6 on 11 October.

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