Saturday, March 11, 2006

Chinese Version Of Lusa Article Is Wary On March 14 Signing

Although there is no indication of trouble at this time, a rewritten story from a Macau-based Chinese English-language Website that originally came from the Portuguese news agency Lusa, which has always been biased with respect to ERHC Energy's rights granted by Sao Tome and Principe, is oddly reserved and differently worded than earlier pieces which also cast doubt on the certainty of the March 14 signing ceremony for Block 4 (and reportedly all other awarded, unsigned blocks) of the Nigeria-Sao Tomne and Principe Joint Development Zone.

The article talks about "splitting production" with Nigerians as though the two were going to develop oil-rich Gulf of Guinea waters themselves, and rather loosely characterizes the deal between ERHC Energy and Godsonic Oil as one in which Godsonic is acquiring nine percent of ERHC Energy, rather than its rights in Block 4.

While little is to be gained from parsing the biased pronouncements of Lusa, the article is sufficient impetus for us to urge readers once again to remain wary themselves as the great day approaches. The piece was rewritten by an obscure Chinese Website and may reflect a bias of theirs as well.

Correction: A poster named Strassenheimer points out on I-HUB
that the next paragraph is wrong about the timing of the meeting. Basically, Nigeria is five hours ahead of us, as I wrote, not behind, as I was thinking. Thus, if the the meeting goes south again, there ought to be ample time for Reuters to report that fact, as it did the last time.

One caution we would provide concerns the timing of the ceremony itself. Due to the fact that Abuja time is five hours ahead of the America's Eastern Seaboard, and that Nigerian oil minister Dr. Edmund Daukoru and JDA Chairman Carlos Gomes both have speaking commitments at Nigeria's annual oil and gas conference that morning, the signing ceremony cannot get underway until long after U.S. stock markets have closed.

As a result, any bad news that may arise from the ceremony cannot immediately be played in U.S. markets - but ahead of the next U.S. opening can be played on the Frankfurt Exchange - and any good news is also vulnerable to sharp share price hikes occurring on the German exchange in advance of the U.S. opening. German trading has rarely if ever impacted U.S. trades, but there is always a first time.

Generally, though, we are optimistic that Block 4 and several others will be signed.

News of the signing should be released by Reuters by 9 p.m. EST, we think, and Dow Jones should have it by the morning's open if not far earlier.

Here is Macau's version of the story from Lusa:

SAO TOME : To discuss splitting oil production with Nigeria

March 11, 2006, 12 hours, 54 minutes and 48 seconds ago.

Sao Tome and Principe and Nigeria are due to meet on March 14 to try to sign an agreement for splitting production from an oil bloc, Portuguese news agency Lusa reported citing government sources.

Sao Tome’s minister for natural resources, Deolindo da Costa said the meeting would discuss oil issues of the joint exploration area between the two countries..

At the meeting, due to take place in Abuja, Nigeria’s capital, the two countries will try to conclude the process for signing an agreement to split production in bloc 4 between them, following a failed meeting on February 24.

The treaty for joint oil exploration, signed in February 2001, divided revenue from the area as 60 percent for Nigeria and the remaining 40 percent for Sao Tome and Principe.

Last February, Nigeria accused the Sao Tome government of trying to make the signing of the contract unviable, a charge denied by the Sao Tome authorities.

The Sao Tome government said that Nigeria was attempting to pressure it into finishing the contract process, without being aware of alleged last minute changes implemented by one of bloc 4’s operators.

Sao Tome’s authorities have stated that without informing either country, ERHC, a Nigerian company heading the consortium operating bloc 4, had included another Nigerian company in its consortium, Godosonic, which acquired a 9 percents take in ERHC.

No comments: