The news came shortly after the rumored dissolution of a deal between Addax Petroleum and ERHC Energy to replace Noble Energy in the consortium that won operatorship of the Nigeria-Sao Tome and Prncipe Joint Development Zone's coveted Block 4. The rumor, fed to Platts, has not been confirmed.
Behind the scenes, we believe, the majors who want to control Block 4's estimated 3.5 billion barrels of petroleum brought pressure to bear on the accounting firm that threatened them with loss of their other clients.
The two oil giants, who are under investigation by the U.S. Senate Commerce Committee for racketeering and bribery in Equatorial Guinea, were contenders for Block 4 who lost out to the Noble Energy/ERHC Energy consortium in the awards made on May 31, 2005.
Anadarko had tried to brng in ExxonMobil as a partner after bidding deadline had passed and was rebuffed by the Joint Development Authority set up under a 2003 treaty between Nigeria and Sao Tome.
Failing that, the companies went to Sao Tome and put forward their favored Tulsa School of Law professor R. Dobie Langenkamp, a former U.S. Dept. of Energy official, as an investigator in a "six week" investigation of the block awards that was initially oposed by Sao Tome's attorney general.
Meanwhile, company lobbyists secretly used the proposed forgiveness of $300 million in debt to the World Bank as leverage to influence the outcome of the investigation, which will put Anadarko and ExxonMobil back into the block. There is little likelhood any longer that they can be stopped except by forceful intervention by Nigerian President Olusegun Obasanjo.
In what was seen as a none-too-veiled warning to Obasanjo, his wife was apparently murdered during minor plastic surgery at a clinic in Spain, and a plane carrying Nigerian officials and Martin Grieves, a former fraud investigator working as an instructor on fraud with Nigerian banks, was brought down in Nigeria, killing all 128 souls aboard, on the same day two weeks ago.
Since that time, Noble Energy has pulled out of the block and the JDA has posted and then withdrawn a press release saying that it had approved and accepted Addax Petroleum as a substitute operator for Noble Energy in Block 4. The JDA also abandoned what had been a disciplined timeline for signing of Production Sharing Contracts for all five blocks offered in late 2004. ERHC Energy won rights in each block under a treaty establishing the zone in 2003.
Here is the ERHC Energy release about their auditor's resignation:
ERHC Energy Announces Resignation of Independent Accounting Firm
Thursday November 10, 5:36 pm ET
HOUSTON--(BUSINESS WIRE)--Nov. 10, 2005 -- ERHC Energy (ERHE.OB) announced today that Pannell Kerr Forster of Texas, P.C. ("PKF") has resigned as the company's independent auditor. No reason for the resignation was specified in the PKF resignation letter. The company has commenced the process of interviewing candidates to serve as successor auditor.
PKF's report on the financial statements for the fiscal years ended September 30, 2004 and 2003, contained no adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.
During ERHC Energy's fiscal years September 30, 2004 and 2003, and the subsequent interim periods preceding PKF's resignation, PKF advised us that there were no disagreements between the company and PKF on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which if not resolved, would have caused the company to make reference to the subject matter in the Form 8-K filed with the SEC.
Based in Houston, Texas, ERHC Energy Inc. is an oil and gas company focused on exploration in the Gulf of Guinea offshore West Africa. For more information, visit the company's website at www.erhc.com.
Contact:
ERHC, Houston
Shanta Mauney, 713-869-0707
smauney@wardcc.com
or
Deborah Buks, 713-869-0707
dbuks@wardcc.com
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