Tuesday, July 24, 2007

New Lies From Chevron?

A sharp-eyed Investor's Hub contributor has found an extraordinary - and false - claim from Houston-based Chevron on the company's Website that says Chevron acquired an interest in "Block 11" of the Nigeria-Sao Tome Joint Development Zone, located 150 miles off the Nigerian coast in the Gulf of Guinea, in 2004.

Problem is, there is no Block 11 - the Joint Development Zone has only 10 blocks, and Chevron has rights in only Block 1, where it holds a minority interest to ExxonMobil's majority interest.

Here is the false claim, one of two Chevron has made recently about its limited rights in the JDZ:

Chevron is leading the JDZ. Block 1 was acquired in 2003, and Block 11 was awarded in 2004. A production sharing contract was signed in 2005. The first exploration well in JDZ Block 1, Obo 1, was completed in 2006 and found hydrocarbons. Commercial options are currently being examined to determine the potential for additional drilling.

After letting it slip to a French oil newsletter and then The Wall Street Journal that it had made a huge discovery in Block 1 in 2006, Chevron slowly backed away from the claim and said it had doubts as to the "commercial viability" of the find.

That contretemps may have been a way of embarrassing the Nigerian government of President Olusegun Obasanjo, which had trumpeted the find in hopes of gaining new entrants in the next JDZ licensing round, after Chevron's embarrassing performance in the 2005 Licensing Round. Or it may just be that it's in the company's interest to minimize the find to reduce its royalty load from recovered oil.

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