Thursday, January 12, 2006

Upstream's Barry Morgan Sees Slippage In PSC Dates

UpstreamOnline's veteran oil industry reporter Barry Morgan confirms our report of a Joint Ministerial Council meeting next week but sees signs of slippage in the mid-January target for PSC signings forecast by Nigerian officials, including OPEC President Edmund Daukoru, Nigeria's oil minister.

But Morgan apparently discounted President Fradique de Menezes' reaction to the Sao Tome probe report at a press conference Tuesday, where the Sao Tome president responded as promised to the probe.

De Menezes said the report was "incomplete" and cited the probe's own conclusion that there was "no evidence" of wrongdoing, as Morgan noted. There is unlikely to be a formal written response, ERHC On The Move believes, for just those reasons. Because there was no more formal response by his newspaper's deadline, Morgan apparently felt the PSC signings would not occur this month.

Here is the Upstream report, posted minutes ago:

Sao Tome turmoil hits block deals

By Upstream staff

Official indications surfacing in Abuja last month that second round licensing awards for the Nigeria-Sao Tome Joint Development Zone (JDZ) may finally be signed by mid-January are looking shaky as political difficulties in Sao Tome intensify, writes Barry Morgan.

Sao Tome had indicated it would react "very soon" to criticisms of the transparency of the JDZ second round contained in a report by Attorney General Adelino Pereira but no statement has been forthcoming. Attempts to unravel allocations at this stage would almost certainly spur protracted legal action and likely freeze E&P plans in the Gulf of Guinea play for several years.

The island's head of state Fradique de Menezes was this week urged to call early elections and fire his Foreign Minister Ovidio Pequeno following corruption allegations. Lawmakers also blocked Menezes' plans to hold a referendum on power sharing while Guilherme Posser da Costa, president of the majority MLSTP-PSD party in the National Assembly ratcheted up the pressure on his administration.

Sao Tome is due to elect a new parliament in March and choose a new president in September, but key opposition figures hope early polls would render Menezes a lame-duck president and pave the way for renegotiating the oil deals.

The primary focus has been on JDZ Block-4 in which Addax Petroleum recently replaced Noble Energy as US minnow ERHC Energy's consortium partner to become the designated operator.

Speaking midweek in Sao Tome, Menezes said the equity awards to ERHC had indeed damaged the interests of Sao Tome but that an official investigation was incomplete. He reasserted the official view that Sao Tome stands to lose $58 million if the second licensing JDZ round went ahead as programmed.

Oddly, Menezes is reported to have claimed that it was still not known who had signed the original preferential rights accord with ERHC in 2001, but hinted MLSTP stalwarts, former prime minister Guilherme Posser da Costa and ex-president Miguel Trovoada, were involved.

He reiterated criticism of his own Attorney General's report for not even interviewing Nigerian officials.

A joint ministerial council meeting of the Abuja-based Joint Development Authority, set up to administer the licensing exercise, is scheduled for next week and suitors hope it will set a firm signing date.

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