A press release from the ANP, the Sao Tome and Principe national oil agency, says this morning that ERHC Energy has lost its rights in Blocks 4 and 5 because it failed to execute Joint Operating Agreements and Production Sharing Contracts by the Joint Ministerial Council's deadline. The report is believed to be false as to Block 4 but correct as to Blocks 5 and 6.
The fact that ERHC did not act on Blocks 5 and 6 ought to benefit the share price, since it had a signature bonus fee that would have been payable in block 5, while its other rights were free. Neither block was attractive to any majors.
Production Sharing Contracts for Blocks 2, 3 and 4 have been completed, according to the statements made by Nigeria and Sao Tome following the March 14 signing of the Block 3 and Block 4 PSCs and the March 15 signing of Block 2.
The I-Hub poster Strassheim said he was booted from PalTalk when he posted the oil agency press release, which remains on its site.
For those who did not see it, here is the release, which once again - please be warned - is apparently false as to Block 4 and correct as to Blocks 5 and 6:
March 20th 2006
Production Sharing Contracts in JDZ Blocks 2, 3 and 4
Nigéria/SaoTome&Principe Joint Development Authority (JDA) have signed Production Sharing Contracts (PSC) in the three oil blocks in the Joint Development Zone (JDZ).
The event took place in Abuja on 14th and 15th March 2006.
The JDA signed a production sharing contract for block 2 with a signature bonus of 71 million US dollars.
SINOPEC, one of the largest Chinese oil companies is the Operator.
The JDA signed a production sharing contract for block 3 with a signature bonus of 40 million US dollars.
ANADARKO, an American independent is the Operator.
The JDA also signed a production sharing contract for block 4 with a signature bonus of 90 million US dollars.
ADDAX, a Swiss oil company is the Operator.
Sao Tome and Principe is entitled to 40 per cent share in proportion in line with provisions of the Treaty.
Regarding Blocks 4 and 5, the ERHC has lost its rights for not complying with the JMC’s directives and timeline for the signing of Joint Operating Agreement (JOA) and PSC negotiations for the said blocks.