The delay was revealed by one Samuel Obiora, a deputy to JDA chief Carlos Gomes, who was scheduled to address the Offshore West Africa oil conference in Abuja at noon Monday but sent Obiora in his place. In our view, Gomes would have been ashamed to make the announcement and thus would have sent an underling to do it, lending credence to the account provided by The Punch.
The delay would be the fourth since Dec. 31, 2004, when the Joint Development Authority failed to award the five blocks on offer as planned, creating massive losses of confidence and investment along the way. It may permit some investors a last-chance opportunity to buy ERHC Energy at $0.50 or below, however.
ERHC On The Move is strongly considering an immediate sale of our entire portfolio of 123,040 shares in order to lock in profits and repurchase in two to three weeks at a more attractive price. In preparation, we have entered a sales order we may yet cancel. Our decision will be determined by trading levels and activity tomorrow morning. We would sell on any substantial rapid dip in price, and likely maintain our position if prices remain within a decent range of $0.705 or if they rise.
The described delay, however, defers the awards much further than already expected. The newspaper seemed to take pains to tie the delay to the failure of the consortium that won the Block 1 concession in Round 1 to pay the signature bonus fee. That had been waiting on resolution of a boundary dispute regarding the Nigerian Block OPL 246, which overlapped with part of Block 1 of the JDZ and required concessions from multinational operators there.
The JDA resolved that issue last week, however, UpstreamOnline reported this past Friday. That publication has also been wrong rather frequently, as when it reported that ExxonMobil faced a March 18 final deadline. The reports also again tests the credibility of JDA spokesman Sam Dimka, who repeatedly assured investors the awards would come shortly after the XOM deadline expired. It is uncertain whether there any longer is a single credible source for JDZ information other than Nigerian President Olusegun Obasanjo and DRSTP leader President Fradique Menezes.
The new report put to rest for good the protests of some investors that ExxonMobil had little or nothing to do with the delays. Today's statement by Gomes clearly lays all the blame on ExxonMobil, as ERHC On The Move had asserted last December. The company controls the process due to its extreme size and vast investment in the country. "Nigeria may soon become an Exxon subsidiary," one angry investor remarked.
It had been anticipated that formal announcement could come by next Tuesday, and now the earliest they would come - if the newspaper is correct, which is not often the case - is a day or two after April 19.
An earlier report appearing exclusively in ERHC On The Move suggested that ExxonMobil could obtain a seven-day extension from the March 21 deadline date, leading to a March 28 deadline and an announcement a few days afterwards. But the
revelation by Obiora today at the Offshore West Africa conference gives ExxonMobil an additional 30 days to decide.
The oil giant could easily obtain another extension after that, given the past history of non-awards.
Delays have frequently extended for many months in the region so that companies and officials can reposition themselves under evolving circustances. Those in the first licensing round lasted close to a year. ERHC On The Move, in a pessimistic mood during the announcement of new delays in February, said that awards may actually be four or five months away.
That assertion was denounced by readers and rapidly countered by Nigerian officials, who nonetheless have never offered a date certain for awards since national petroleum advisor Dr. Edmund Daukoru said they would occur on Dec. 31, in a speech he gave in Abuja at the opening of the second round on Nov. 15, 2004.
Here is the latest report from The Punch of Nigeria:
JDZ: Winners of five oil blocks to emerge in April
by Michael Faloseyi and Clara Nwachukwu
ABUJA -- Failure of ExxonMobil, the global oil giant, to exercise its pre-emption rights has delayed the announcement of winners of five oil blocks in the Nigeria and Sao Tome Principle Joint Development Zone.
Nevertheless, winners of the five oil blocks placed on offer last December will finally be announced next month.
Indications to this effect emerged on Monday at the ninth edition of the Offshore West Africa held in Abuja where the Chairman of the Joint Development Authority, Mr. Carlos B. Gomes, explained that the delay in the announcement was caused by ExxonMobil.
He said that the oil major had not expressed its pre-emption rights in any of the two oil blocks of its choice.
Gomes, who was represented at the forum by the Executive Director, Monitoring and Inspection, JDA, Mr. Samuel Obiora, said that the oil company has up till April 19, 2005, to express its rights and that as soon as that is done, a meeting of the Joint Ministerial Council would be hold to ratify the winning bids.
The oil company has already expressed its 40 per cent pre-emption rights in block one, but failed to express its interest in any of the two blocks out of the five blocks placed on offer in December, a development that has delayed the announcement of the winners in those bids.
The JDA had last December, received 26 bids from 22 companies for blocks 2 to 6, which were declared open then.
Gomes said that the winners of the five oil blocks would be expected to drill at least, two wells in three phases within the first eight years of the announcement, which would be indicated by the work schedule submitted with their bids.
He said that biddable signature bonus; production bonus and social projects would be major determinants of the eventual winners in the bid exercise.
The other indigenous oil company with pre-emption rights, Environmental Remediation and Holding Company, has exercised its initial pre-emption rights of 30 per cent in oil block 2 and 20 per cent in blocks 3.
Contrary to the procedure in the block 1, where ExxonMobil expressed its interest before EHRC, the authorities had given the rights of first pre-emption to the indigenous company, contrary to the normal procedure.
However, indications are that the governments of both countries have not received the signature bonus of $123 million placed on block one by the consortium of ChevroTexaco with 51 per cent equity, ExxonMobil with 40 per cent and Dangote-Energy Equity Resources with 9 per cent.
The Punch, Tuesday, March 22, 2005
11 comments:
The Nigerian scam comes in many forms!
Mr. Samuel Obiora, who? This article is so out of context with what is already reported it`s almost funny. Seems we my continue to get more buying opportunities coming down the line if this type of reporting can be published up to and after awards.
Mr. S. Obiora is "Engr. S.U. Obiorah, Executive Director, Monitoring and Inspection Department of the JDA."
Check here:
http://www.nigeriasaotomejda.com/
The article seems to be authoritative, so we will now have to impatiently wait until after April 19 for our just due.
This only creates another buying opportunity as Joe suggests.
ERHE's perfection of its rights will occur -- when is the uncertainty.
So patience for now....
Joe,
You say the Punch is often incorrect, yet look at the headline you write under!! You act like a delay is an absolute fact. WHY DO YOU CONSTANTLY PLAY WITH THE FACTS? You must have an agenda. I hope you cross the legal line one of these days and are taken to task for your biased and inconsistent writings. Please note that I did not use the term "reporting".
Joe,
If the SEC nails you for stock manipulation, would you have to surrender your gains?
anonny
Did'nt you just run an article that stated a 7 day delay and predict a drop in s/p due to that story? That did'nt work so now your at it again. It seem's to me that your predictions are wrong most of the time so why do you continue to make yourself look foolish? Here's a suggestion, just print the article and leave out your price prediction. Either that or get a new crystal ball cause the one your using is defective!
This punch article may just be an overview.
Monday's Abuja meeting with XOM may or may not have produced results.
Carlos obviously had other obligations on Monday and was not present at the Offshore West Africa Conference.
I won't be duped by the media.
Expect surprises.
It will be interesting to see if the Punch article is indeed correct. My understanding is that ExxonMobil was contractually and hence legally obligated to exercise its JDZ options within 30 days of notification, which term ended on or about March 19th. If ExxonMobil has indeed been given an unfair and extra-contractual advantage, perhaps injurious to ERHC Energy and its shareholders, that might raise legal questions about the actions of both ExxonMobil and the JDA. So let's hope the Punch article is wrong.
I put a sell order in for 50K, although I hope to cancel it if the price stays steady. There's just no way to tell whether the report is bogus, but I tend to believe it and think the price will fall quite a bit lower when it sinks in over the next day or two. We are lucky to have the early word, and that was the whole purpose of this blog - to provide the news and to offer my personal advice to everyone who is on this journey with me. With tax time coming and a big trip planned, I can't afford to let my profits slide back to zero while these JDA hucksters play around. If I am wrong, I will regret it big time.
joe, do us all a favor and sell all i think your a day-trader anyway.....
JOE- DID YOU SELL? LET YOUR FAITHFUL READERS KNOW PLEASE!
JOE- DID YOU SELL? LET YOUR FAITHFUL READERS KNOW PLEASE!
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