Tuesday, January 17, 2006

Daukoru Tells Platts PSC Signings Are Imminent; Market Responding With ERHE Buying Spree

A Nashville poster to I-Hub has just released a new article from Platts by Jacinta Moran, who spoke to Dr. Edmund Daukoru, Nigeria's oil minister and President of OPEC, and learned that PSC signings for the blocks awarded in the Second Licensing Round of the Nigeria-Sao Tome and Principe Joint Development Zone are on track to be signed "any time soon."

Responding to the news, a nearly unbroken series of buys totaling 164,050 shares starting at 10:09am EST have lifted ERHE from a low of $0.30 to $0.304 at 10:56am EST, but the price is still below the day's high of $0.305.

Here is the Platts article Mark St. Amour posted after Jacinta Moran filed it minutes ago:

Nigeria's oil minister Edmund Daukoru expects block contracts awarded last month in the Nigeria-Sao Tome Joint Development Zone (JDZ) second oil round may soon finally be signed despite political woes in the former Portuguese colony.

"We would have liked to have signed on Dec 10, but any time now we expect to sign," Daukoru told Platts in a telephone interview.

A joint ministerial council meeting of the Abuja-based Joint Development Authority, set up to administer the licensing exercise, is still scheduled for this weekend where a signing date is expected despite the resignation of Sao Tome's Foreign Minister Ovidio Pequeno, a spokesman for the JDA said.

"I am not aware of a postponement. The meeting has been scheduled for Friday and Saturday," he said.

Pequeno stepped down as foreign minister on Monday after Sao Tome President Fradique de Menezes refused to fire him in the face of criticism from the center-left MLSTP party that he had improperly used of Moroccan aid money.

The government of Sao Tome earlier this month said it would make public its reaction this month to an official investigation into alleged wrongdoing in the award of five blocks in the JDZ but a statement has yet to be issued.

A report published Dec 9 by the Sao Tome Attorney General's Office said several of the companies awarded blocks lacked the technical know-how and the financial muscle to carry out the work, and that the procedures used to select the companies did not satisfy minimum standards.

Some studies suggest the Sao Tome and Principe islands, which gained independence from Portugal in 1975, sit on between 6- and 11-bil bbl of crude.

Two US oil companies, Chevron and ExxonMobil, in May last year signed oil exploration contracts for block 1.

--Jacinta Moran, jacinta_moran@

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