The Battle For Awards Moves To Sao Tome's Parliament

With the second-to-last step in the Nigeria-DRSTP block awards completed, the focus now turns to Sao Tome and Principe's fractious Parliament, where a group of politicians more concerned with their political futures than their nation's financial health prepare a last-ditch effort to stop the awards.

The outcome of the debate scheduled for Monday on the floor of the Parliament may not be known tomorrow; it is anticipated that the naysayers will try to blocks the awards for as long as possible, and therefore would want to block any vote, much as the filibuster technique sometimes blocks votes in the U.S. Senate floor, for at least several days.

Notably, Parliament was not mentioned on the list of three separate bodies which President de Menezes said on May 5 must achieve unanimity in order for the awards to go ahead, unless Parliament reconstitutes itself (as sometimes happens) as the National Petroleum Agency for the purpose of passing on awards. On this point, he used the following phraseology in the Portuguese-language story published by Lusa on May 6:

Fradique de Menezes explicou ainda que as decisões para a adjudicação de blocos são tomadas por unanimidade em parceria com as instâncias petrolíferas do país: o conselho nacional de petróleo, a agência nacional de petróleo e a parte são-tomense pertencente a autoridade conjunta de exploração São Tomé e Príncipe - Nigéria.

A translation of that would be something like, "President Fradique de Menezes explained that the decisions on the adjudication of the blocks needed unanimity from the three oil authorities of the country: the National Petroleum Council, the National Petroleum Agency and the Sao Tome part of the Nigeria-Sao Tome and Principe Joint Development Authority."

We know virtually nothing of the Sao Tome parliament's predilections, other than that they rebuffed an attempt to curtail the rights of ERHC Energy last Summer, and that it is controlled by the two-party coalition known as MLSTP/PSD that elected Prime Minister Vaz de Aleida.

President Fradique de Menezes' own two-party coalition, MDFM/PL, won the presidency in national elections which are due again next year, and much of the posturing on either side of this issue is related to that election and one of its leading candidates, Patrice Trovoada, the son of former President Miguel Trovoada who signed the "disastrous accords" guaranteeing ERHC its prefential option rights on February 21, 2001.

Unfortunately, there is very little coverage of Sao Tome's parliament in any venue, including the nation's major press organs, the Nigerian press, Reuters, Dow Jones or even Lusa, the Portuguese news agency that does carry several stories a week on Sao Tome. It may be hard for investors here in the United States to get any reliable word of the events there until several days have passed.

That said, it is worth noting that the President has taken some extraordinary steps to appease the apparent anger in Parliament that has developed over the role of his Joint Ministerial Council negotiator, Mateus Meira Rita, as a shareholder and apparent former executive or advisor to ERHC Energy while negotiating the block awards. The President accepted Rita's resignation from the JMC, saying it "obviously" violated the country's 2004 "transparency" law, while retaining him in his presidential cabinet.

President de Menezes himself has also been accused of being an ERHC shareholder, but appears to have denied it, yet has taken the step of removing himself from the chairmanship of the National Petroleum Council. Finally, he fired his special counselor on oil, Patrice Trovvoada, who was said to hold stock in a rival bidder that did not win anything in the block awards.

Whatver one might wish to say, it is clear that Monday will be a day of great challenge for President de Menezes, for ERHC shareholders and for the Nigeria-DRSTP Joint Development Authority, which promised awards last week to ERHC Energy but has been unable to deliver. All of them have to await the deliberations of Parliament with bated breath.

Indeed, while the de facto approval of the awards by the National Petroleum Cuncil seemed like a great basis for exuberance on Saturday, as we go to press Sunday night the mood is once again dampened by the prospect of yet more days of fierce political infighting whose outcome, regrettably, can only be described as "unknown."

If we pass that hurdle, the final step remains: President Fradique de Menezes affixing his signature to the awards document, and sending it back to Abuja for the awards announcement by the JDA.