A Sao Tome "week" is about a month in the rest of the world.
Here is the latest from Jacinta Moran, who has proven to be a very good reporter on these issues:
Sao Tome/Nigeria block 4 partners to sign deal; others postponed
--Platts Global Alert--
Paris (Platts)--22Feb2006/1156 am EST/1656 GMT
Partners in awarded acreage in deepwater block four in the Joint Development Zone (JDZ) managed by Nigeria and Sao Tome and Principe will sign final terms of the Joint Operating Agreement (JOA) before the end of the week, but the signature of contracts for blocks 2, 3, 5, 6 has been postponed.
The meeting on production sharing contracts scheduled for Feb 27-28 of the Nigeria-Sao Tome and Principe Joint Ministerial Council (JMC) will be postponed by a week, Sao Tome's National Petroleum Agency executive director Luis Prazeras told Platts in a telephone interview Wednesday.
"Just this morning, I got the information that the meeting will be postponed but a date has still to be confirmed. We don't know exactly when but it could probably be one week later," he said.
Houston-based ERHC Energy and Swiss-based Addax will, however, sign the JOA for block 4 in Abuja either Thursday or Friday, the first block to be signed in the controversial second round awards, a spokesman for the Joint Development Authority told Platts Wednesday. "They have already agreed the framework; it is ready to be signed either Thursday or Friday," he said.
Winners of the five blocks were announced in May 2005. But the process has been plagued by allegations of corruption, political wrangling that have delayed signing of the agreements. Since the awards, three US independents--Pioneer Natural Resources, Devon Energy and Noble Energy--have quit negotiations.
The JDA earlier this month approved Swiss-based Addax Petroleum's replacement of Noble Energy as ERHC Energy's partner and operator in block 4.
Noble Energy and ERHC Energy last May were awarded the stake after Noble offered a front-end bonus of $57-mil along with a pledge to drill three wells during the first exploration phase of four years while its rival, Anadarko, had offered a much higher bonus of $91-mil, but committed itself to drilling fewer wells over a longer period of time.
CHEVRON SHOWED INTEREST IN TAKING EQUITY IN BLOCK 2
Prazeras also said Chevron had expressed interest in taking equity in block 2 when Pioneer pulled out of negotiations earlier this month but this interest had not been pursued. "Chevron showed some interest in block 2 when Pioneer withdrew. They sent a letter showing interest but I believe they showed no further interest after that," he said.
Industry sources have recently said Chevron has renewed interest in block 2 where China's Sinopec is hoping to take operatorship in partnership with Houston-based preferential rights holder ERHC Energy. Prazeras said the JMC, the bilateral body overseeing the JDZ Authority, has yet to approve Sinopec, which has signed a MoU with ERHC, as a prospective operator of the deepwater block.
"It has not yet been approved. Initially, the meeting that was scheduled for the end of February would have decided approval so Sinopec is still an open decision. Probably in the next JMC, it will be decided," he said.
NO OFFICIAL WORD ON MAJOR CHEVRON FIND IN BLOCK 1
Sao Tome government officials have yet to be be told "officially" if Chevron and ExxonMobil have struck a major find in deepwater block 1 that may also straddle ERHC's block 2 in the Joint Development Zone, Prazeras said.
"We have no official news so the government cannot say, at least, until we hear officially from Chevron. Unofficially, we have information that everything is going very well on block 1," Prazeras said.
Strong indications have emerged in recent days that Chevron has encountered a substantial oil-bearing structure in the exploration well Obo-1 in block 1, the only block awarded in the first licensing round.
Operator Chevron and its partners, ExxonMobil (40%), Dangote-EER and Afren started drilling the 60-day well in mid-January. The block will test the potential of Nigeria and Sao Tome's shared offshore region and has generated considerable interest from global upstream players.
Chevron has a 51% stake in block 1, ExxonMobil 40% and Nigerian Dangote-EER/Afren 9%. The consortium won exploration rights to the block with a $123-mil bid in an October 2003 bidding round.
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.
Under the terms of a treaty signed in 2002, Nigeria, which is already Africa's largest oil producer, will take 60% of all oil and gas revenues. Sao Tome will take 40%.
--Jacinta Moran, jacinta_moran@platts.com
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