Here is the The Tide's March 6 article:
Sao Tomeans and JDA
• Monday, Mar 6, 2006
The Nigeria-Sao Tome and Principe Joint Development Authority (JDA) has suffered a setback.
The setback is the inability of JDA to sign the Production Sharing Contracts (PSCs) on five blocks in the Joint Development Zone two years after the contracts were awarded.
JDA had in November 2004 awarded five oil blocks to a consortia of oil companies, including some multinationals.
But there has always been some elements of distrust on the side of the Sao Tomeans in the venture, which was established in February 2001 between their country and Nigeria on a 60/40 ratio in favour of Nigeria.
This development had impacted negatively on the activities of the joint venture since inception.
The Sao Tomean attorney-general had in November last year conducted an investigation into the award of blocks in the JDZ and concluded that the awards of the contracts were fraught with irregularities.
The attorney-general’s office had called on the U.S. authorities to probe the award of five oil block licences to ERHC by the JDA based on the reports of the investigation.
ERHC is a U.S. based company involved in exploration and production of oil in Africa.
It won stakes in all the five blocks awarded because of its pre-JDA oil activities in the JDZ.
As a result of the report, two American oil firms (Noble Energy and Pioneer) that had an MOU with ERHC to develop blocks two and three pulled out of the venture.
The development led to ERHC wooing Swiss Addax petroleum to take up their stakes in the blocks.
Minister of State for Petroleum Resources, Dr Edmund Daukoru, while reacting to the call for a probe said the award of oil blocks in the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ) was transparent and without irregularities.
“We worked hard as a team to arrive at who gets what in the JDZ,” Daukoru said in Abuja.
The report had alleged that the U.S. based ERHC made improper payments to key decision makers in Sao Tome in a bid to get the contract awarded to it.
According to Daukoru, the report is based on the lack of information and high internal wrangling at the top of the Sao Tomean government.
“1 have a copy of the report and 1 have rejected it in its entirety,” he said.
The minister said Sao Tome and Principe was struggling to cope with a multi-party government, with the president in one party and the prime minister in another.
He explained that ERHC was prospecting in Sao Tome and Principe before the establishment of the JDA and had been providing assistance to the country in areas of infrastructure and transport among others.
The venture suffered a heavy blow at the weekend in Abuja, when winners of block four assembled to sign the PSC, only to learn that the Sao Tomeans had requested for more time to study the PSC that was earlier outlined with their full participation.
The winners of the block led by Addax Petroleum of Switzerland expressed surprise at the turn of events.
Chief Executive Officer of Addax Jean Clude Gandur lamented the situation and said such behaviours would discourage investment in Africa.
Daukoru had apologised to the international investors on behalf of Nigeria and demanded an apology from the Sao Tomean government in the interest of the venture.
He said the delay in signing the PSCs was denying the two countries huge revenue for development and expressed optimism that all the PSCs would be signed in no distant future.