Wednesday, January 25, 2006

Platts: STP Oil Minister Thinks Block PSCs Will Be Signed 'Before April'

A new story from Platts' Jacinta Moran Wednesday quotes Sao Tome and Principe oil minister Deolindo da Costa as saying he thinks Production Sharing Contracts for all five blocks in last May's Nigeria-DRSTP Joint Development Zone "will be signed before April."

ERHC On The Move said about six weeks ago that the contracts would likely be signed in April.

Moran says the report opines that the block deals "were not seriously flawed," but that may be a typo. Most reports say they were, although there was no evidence of wrongdoing found.

Da Costa also told Moran he has been unaware of rumors that plans are afoot in Nigeria to dissolve the Joint Development Authority after a series of costly and disappointing delays in the licensing process.

Moran indicated Nigerian rumors suggest that possibility, which an aide to OPEC President and Nigerian oil minister Dr. Edmund Daukoru denied last week.

Meanwhile, in a second note to I-Hub poster Mark St. Amour of Nashville, Moran told the poster that Daukoru assured her all five blocks would be signed and that the Addax deal would be approved. That note, as Mark posted it, appears after the Platts story.

Sao Tome Natural Resources Minister Deolinda da Costa Tuesday said the next meeting of the Nigeria-Sao Tome and Principe Joint Ministerial Council would go ahead in mid-February and that Production Sharing Contracts for the five blocks awarded last May would be wrapped up before April.

"I think they will be signed before April," the minister said in telephone interview.

The minister said he was also not aware of rumours in Nigeria that plans are being discussed at a government level to dissolve the JDA which was set up to a manage the licensing round.

The Abuja-based authority has been under pressure for months to get the deals for the five choice blocks signed off but disputes, postponements and political complications in Sao Tome have delayed the whole process.

"The JDA's position is to conclude and have everything signed so work can continue," the JDA's spokesman told Platts.

Meanwhile, a report on an investigation by Sao Tome's attorney general into alleged wrongdoing in the award of five blocks has been made public and has found that the deals were not seriously flawed.

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.

The attorney general has also called for a US investigation of the award of oil blocks to US minnow ERHC Energy, which was the biggest winner in the licensing round, gaining equity stakes ranging from 15% to 65% in the
five blocks, claiming ERHC's participation in the round deterred qualified companies from the bidding.

ERHC Energy, based in Houston and controlled by Nigerian
millionaire Emeka Offor, said the report was a "direct attack" on the Nigerian government and said it should take exception to the claim that the round was a failure, as the government of Sao Tome participated fully in all aspects of the process that led to the final award of the five blocks.

--Jacinta Moran,

Here is the follow-up note from Jacinta to Mark:

****UPDATE 2****

Just got another email from Jacinta. Read our correspondence below:

My Email to Jacinta:
did Da Costa say all 5 Block PSC's will be signed (Blocks 2,3,4,5 and 6)? This is what I am hearing.

Jacinta at Platts REPLY:
Daukoru insists they will all ALL be signed and da costa didn't say anything to say this wld not be the case. Addax is on board no matterm what the sao tomeans have said in the past. Rumours of nigeria dissolving the jda , I hear are not true but I have to talk to nnpc tomorrow. They will all be signed, it just has to be done this time.

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