Monday, March 06, 2006

Ethnic Militants Threaten New Cuts On Nigerian Production; Sao Tome Says They Haven't Yet Received The Block 4 JOA They Want To Review

Nigerian ethnic militants from the Ijaw communities of the oil-rich Niger Delta are threatening additonal attacks on oil facilities to achieve a production cut of 1 million barrels per day, nearly double the 455,000bpd cut that followed attacks on Shell facilities, CNBC reported minutes ago.

We will keep an eye out for additional details on this story.

In other news, a Lusa news agency report says Sao Tome officials have not yet gotten the Joint Operating Agreement documents they demanded for review at the Feb. 7-8 Joint Ministerial Council meeting, with the result that the country's delegation left the talks without signing a Block 4 Production Sharing Contract as expected.

If the Lusa story is accurate, it could presage further delays in the PSC signing.

Here is the English version of the Lusa story. Note that it speaks near the end of a "massive" Block 1 find by Chevron:

Sao Tome: Islands dismiss Nigerian charges, blame Abuja for oil deal fiasco

Sao Tome, March 6 (Lusa) - Sao Tome and Principe has rejected Nigerian charges the archipelago was responsible for blocking the signing of a production sharing contract for a key oil exploration block in their shared Gulf of Guinea Joint Development Zone (JDZ).

In a communiqué issued Saturday, Sao Tome's National Petroleum Agency (ANP), noting that Abuja had called for a formal apology, placed the blame for the failed Feb. 24 ceremony on Nigeria, saying it had refused its powerful neighbor's pressure to sign unseen documents altered at the last minute.

"At no moment did the government of Sao Tome and Principe request any postponement of the production sharing contract signing ceremony for Block 4, nor did it show opposition to the signing of any other contract" in the Nigerian capital, said the ANP.

The communique was the islands' first response to accusations leveled by Nigerian Oil Minister Edmund Daukoru, the current head of OPEC, who demanded an apology from the archipelago, which he described as a "bad business partner".

The oil agency said the STP delegation had simply refused pressure to ink the Block 4 PSC, whose signature bonus is worth USD 90 million, without first studying 11th-hour alterations introduced into the contract by ERHC Energy, a Nigerian-controlled, US-listed company that won preferential interests in all five JDZ blocks awarded last May.

The key snag, ANP said, was the inclusion in the Block 4 Joint Operating Agreement (JOA) between the companies of the acquisition of a 9% interest from ERHC by Nigerian minnow Godsonic.

"Faced with these facts, the government of Sao Tome and Principe requested a copy of the Joint Operating Agreement among the companies, information that has not been received up to the present date", the ANP said.

Houston-headquartered ERHC and Addax of Switzerland have been approved as operators of Block 4.

In the wake of the aborted Feb. 24 ceremony in Abuja, the Joint Development Authority, the body overseeing the JDZ, indicated it would reschedule the signing for mid-March.

Four other blocks awarded last May also await the signing of their respective PSCs.

Industry interest in the JDZ has grown along with rumors that US Chevron has made a still unannounced massive find in Block 1, the only block to be awarded in the first joint licensing round held in 2004.



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