The paper's Website says Iran may decide to stop shipment of oil, but does not mention the Iranian-controlled Strait of Hormuz, through which passes some 25 percent of the world's oil supply. The paper focuses only on the threat to the five percent of world supply produced by Iran.
ERHC On The Move reported an Iranian oil official's threat to close the strategic Strait of Hormuz early last week.
If a rising tide lifts all boats (some may be badly moored and smash on the rocks, of course), ERHC Energy's equity in five blocks of the Nigeria-Sao Tome and Principe Joint Development Zone could attract a swarm of new investors - especially if, as some perceive, a JMC meeting early or late in the week of Feb. 5-11 yields signed Production Sharing Contracts.
Regrettably, though, ExxonMobil and Anadarko may have yet another bomb to drop on ERHC's share price, this one from their friends at the Justice Dept. who have turned a blind eye to the bribery allegations against them in Equatorial Guinea that have come before the oil-friendly Sen. Ted Stevens' Senate Commerce Committee.
Well-timed strikes by these two reprobates thus far have short-circuited every attempt to bring ERHC's share (OTC BB symbol: ERHE) price to levels consistent with ERHC's prospects as joint operator of Blocks 2 and 4 - which XOM and APC especially wanted - and holder of substantial equity in all three other blocks.
ERHC On The Move has learned from a very knowledgeable source in Washington that the company may be tied to the influence-peddling probe mounted last year against Louisiana Rep. William Jefferson.
Our source, a top Washington-based investigative reporter for one of the nation's largest wire services, says "We're looking for more confirmation that Global Environmental Energy is part of the probe. We also suspect, but don't know for sure, that the feds are looking at Jefferson's role assisting ERHC."
Moreover, our most reliable source of information on the JDZ, Mutwadadi, whom we asked for a comment on the probe, indicates he remains pessimistic about PSCs, saying they well may not be signed until after April despite the drilling in Block 1.
Here is mutwadadi's note:
Thanks for your note. Feds didn't turn up much on Atiku Abubakar when they had a look, but Jefferson surely has form in Nigeria. ERHC chairman felt sure enough to travel to the US only last week, although I agree many there in the law enforcement community might have an interest in his affairs. On the other hand, Carl Masters and Andy Young can;t be too far behind Jefferson. And as for Offor - how he did it is a mystery, but the collapse of the bank looks set not to cause further difficulties. Cynics may note he is from the same state as the Central Bank governor.
The JMC has to meet soon because the JDA is without a budget and without any resources.
One block is ready to be signed off. One block is not. The others are less clear. There are two problems. Sao Tome is in election mode and even more paralysed than normal. Nigeria's deputy oil minister has always insisted on simultaneous signing of all the blocks.
The factor that may overcome such constraints is the block 1 situation: it will be clear by March whether there has been a discovery or a dry well. Either way, that will change the situation significantly.
The question is, are officials ready to gamble on the outcome? If they are not, it's possible something can be signed off next month, but there is a lot of lobbying left to do if that were to include block 4. If they do want to gamble, there's no guarantee anything of substance will happen 'til after April.
As to the origins of this note: A poster named Spec on I-Hub fantasized a chain of events that supposedly began with a letter from me to Mutwadadi asking something or other. Actually, it began a month ago when an investigative reporter based in Washington - as noted above - contacted me for information about a GEECF principal. I was able to help. A full month later, he replied to thank me, and I wrote back asking when his story on GEECF might come out. I got back, in part, the response I quoted above, and then passed that on to Mutwadadi for comment, as below:
To return the favor, I thought you might appreciate this tidbit. [Name withheld] is a top investigative reporter with [Name withheld].
Please keep it in confidence.
Have you heard anything other than what we have on the possible JMC meeting
date, or the JDA's "remarkable" progress on PSCs?
The American Reporter
In contrast, here's the fantasy Spec concocted:
As for Mutwadadi's little note, Joe sent Mutwadadi an email asking about ERHC's new CEO questioning his "could be" criminal background. Joe also asked him how Offor escaped charges in the collapse of Afex Bank. Mutwadadi's admitted lack of knowledge on the JMC meeting and possible outcomes this month means both sides are being tight lipped about their plans and a power play is about to happen.
Be careful if you rely on information from Spec!
On another topic, we learned early this morning from the Guardian of Nigeria that the aging father of Prof. Charles Soludo, the stalwart chaiorman of the Central Bank of Nigeria, was attacked by apparent assassins who got into his compound through some new construction at the rear this weekend and succeeded in badly injuring him with a beating that resulted in the loss of one eye.
We extend our deepest sympathies to Prof. Soludo, and express our strongest condemnation of an act that shocks the conscience, is uncivilized, ugly and unwarranted in the extreme.
Finally, here is the the story from England's Guardian:
Iran crisis 'could drive oil over $90'
Prices climb ahead of critical week as nuclear row escalates. OPEC says it won't increase quotas to cover for production shutdown
Heather Stewart, economics correspondent
Sunday January 29, 2006
Oil markets are braced for a nail-biting week, as world leaders demand action against Iran over its nuclear ambitions, and analysts warn that crude prices could reach $90 a barrel if the oil-rich state retaliates by blocking supplies.
The International Atomic Energy Agency meets on Thursday to decide whether to refer Iran to the United Nations Security Council.
Mahmoud Ahmadinejad, Iran's president, has threatened to respond to any punitive action by cutting off the 2.6 million barrels of oil a day it pumps into the markets - 5 per cent of the world's supply.
Jittery investors sent the price of Brent crude to $67.76 a barrel in New York on Friday night, as fears about the Iranian crisis and rebel attacks on oil facilities in Nigeria rocked confidence in an already tight market.
Kona Haque, commodities editor at the Economist Intelligence Unit, said the worst case scenario of a shutdown of supplies from Iran would be 'absolutely devastating ... I wouldn't be surprised to see the price go over $90 a barrel'. She said fears about Iran are already adding a $10 risk premium to oil prices, which could remain in place for months as the crisis escalates. Davoud Danesh-Jafari, Iran's oil minister, has warned that the result of punitive action against his country would be 'the unleashing of a crisis in the oil sector'.
'The resumption of nuclear research by Iran is currently the market's largest preoccupation,' said BNP Paribas oil analyst Eoin O'Callaghan. He has pushed up his forecast for average oil prices this year to $65 a barrel because of geopolitical risk. He points out that the oil price rose more than 60 per cent in the run-up to the Iraq war; a similar increase now would take prices to $94.
Haque said that with little spare capacity in the market, prices are much more vulnerable to political shocks: 'We need a lot more supply capacity to have a cushion; it's going to take another couple of years until that happens.'
The oil producers' organisation Opec meets in Vienna on Tuesday amid calls from some members, including Iran, to cut back production and push up prices further. But most analysts believe production quotas will be left unchanged. 'There's no pressure on Opec to do anything,' said Rob Laughlin, oil analyst at Man Financial.
He said the Nigerian situation could potentially be worse for oil prices than fears about a supply squeeze from Iran. Production levels in Nigeria have already been lowered by 200,000 barrels a day in an effort to protect facilities from the rebels, who have deliberately targeted foreign oil companies. 'Nigeria is probably as big a problem as Iran for us. We're pretty politically squeezed, between the Nigerian rebels and the Iranian president,' said Laughlin.
The president of Opec, Nigeria's Edmund Daukoru, fuelled market fears on Friday when he told Reuters that his organisation was unlikely to step in with extra supplies if the Iranian crisis worsened. 'If Iran decides to stop production, or is forced to stop production because of a sanction, I don't think Opec necessarily has a role to play there,' he said.
Crude peaked at just over $70 a barrel last autumn after hurricane Katrina, but demand from fast-growing economies such as China and India, together with supply shortages in a number of producing countries, has prevented prices from dropping much below $60.
Investment in Russian oil production has been weak since President Putin's tax raid on the oil giant Yukos, and Iraqi output is well below the levels Washington hoped for before coalition tanks rolled into Baghdad. A cold snap in the US, which has so far had an unusually warm winter, could push prices up further in the weeks ahead. 'Should cold weather return to the US, then we'll really be in trouble,' said Laughlin.