The Nigeria-Sao Tome and Principe Joint Development Authority could be dissolved if Sao Tome does not move towards a consensus with Nigerian delegates to the Joint Ministerial Council, a high-ranking Nigerian foreign affairs official said as the second day of JMC meetings with Sao Tome and Principe officials got underway this morning.
JMC member and Nigerian deputy foreign minister Abubakar Tanko said the "bond of partnership" with Sao Tome would be "seriously affected" if Sao Tome and Principe delegates continued to delay announcement of the block awards negotiated by the JMC three weeks ago after a five-month delay in announcing them.
The last licensing round, for nine blocks, ended in chaos as one block got awarded and the rest were put out for rebid more than a year after awards were anticipated.
Meanwhile, there was no announcement at the end of the business day in Abuja, and a press release promised by the Joint Development Authority has not appeared on its Website. It is common for the JDA to promise things but fail to deliver for days, weeks or even months, and it has done so countless times since last year through its spokesman Sam Dimka and its official Secretary.
News reports published by Reuters and others said the "integrity of the process" was at stake. The endless delays have frustrated investors and outraged Nigerian officials, who signed off on the proposed award of Blocks 2 through 6 in the oil-rich Gulf of Guinea's Joint Development Zone at the beginning of the month and expected Sao Tome President Fradique de Menezes to do the same.
Instead, upon receipt of the award documents de Menezes was forced to follow a circuitous legal path mandated by a new petroleum law through the National Petroleum Council, the National Petroleum Agency and Sao Tome's parliament, and began shedding officials through resignations and firing as soon as the process began.
Even de Menezes resigned as head of the NPC after he had also accepted the resignations of oil minister Arlindo Carvalho and foreign minister Mateus Meira Rita, and he fired Equator Exploration lobbyist Patrice Trovoada, the son of the immediate past president of Sao Tome, as his special presidential advisor on oil after agreeing that Trovoada had a serious conflict of interest as a member of the country's Joint Ministerial Council delegation which negotiated the awards.
Sao Tome borrowed $44 million from Nigeria based on its expectation of getting a $49 million share of the $123 million Block 1 signature bonus fee paid into a Nigerian bank account by ChevronTexaco, ExxonMobil and two independents, Norway's financially-troubled Energy Equity Resources (EER), which originally had a 9 percent share of Block 1, and Afren, a Nigerian firm that bought half of EER's share when the former was forced to sell. The bank deposit broke the rules of the JDA agreement, known as the Abuja Accords, and Nigerian foreign ministry officials have stated that payment of the funds, which they now control, is contingent on Sao Tome's signature on the awards document.
The two spokesmen for the delegations went head-to-head in the press via a Reuters interview in which Carvalho said that "when we went home after a deep analysis we came to the conclusion that some things needed to be done," while Tanko seemed determine to preserve the original list of award-winners.
"If we continue to allow extraneous factors to guide our thoughts and decisions it will seriously affect the bond of partnership," Tanko told Reuters ahead of the the second day of meetings.
The consequences of dissolving the rickety, almost unworkable partnership between Nigeria and Sao Tome would slow the awards process and permit lawsuits to prosper as the two countries fought for their fair share of the Gulf of Guinea Joint Development Zone. That is likely a battle that Nigeria would eventually win.
Victory could come at a difficult time for Nigerian President Olusegun Obasanjo, however, as his party faces new presidential elections in 2007, as does de Menezes' MDFM party in Sao Tome.
Obasanjo may soon become embroiled in an impeachment trial, and de Menezes faces a thoroughgoing investigation he has ordered into the failure of the first awards decision three weeks ago due to conflicts of interest alleged against him and several members of his cabinet. He in turn has charged that corruption was involved in earlier opposition party decisions about the JDA and has vowed to uncover it.
A "transparency" law written by students at Columbia University has become the nexus for political maneuvers that could now kill the "golden goose" that oil was expected to become for Sao Tome. There is little doubt that the former Communist Party officials who run the Movement for the Liberation of Sao Tome (MLSTP), now the ruling party in Sao Tome's parliament, who are avowed Marxists, would forego the money to gain political power through embarassing the MDFM president ahead of elections.
That is not true in Nigeria, where corruption is an accepted way of life and where an effort to stem it has backfired with potentially serious consequences for Obasanjo.
Opposition to both men is well-organized in their respective countries, so that a failure to deliver awards now could well mean they would not be made within the coming year but would await the outcome of the 2007 elections in both countries when officials could determine who has the upper hand in the political process and then proceed accordingly.
Subscribe to:
Post Comments (Atom)
21 comments:
Joe what would happen if the JDA were dissolved?
Is there anyway that Nigeria can claim that Sao Tome is not operating in good faith and announce the awards without them?
Typical of you to twist words around and make up stuff Joe. Where does Tanko say the Jda may be dissolved? Please respond to my comment. Your quote uses the phrase "bonds of partnership". How do you then connect the JDA to that phrase? The two countries are interwined in many ways. Please respond.
Thank you,
Doug C
Sao tome damn well deserve to lose it all. these dumb basdurds should never have had these islands.
It's actually "bond of partnership," Doug, and I think you know damn well what it means in this context. He wasn't talking about cultural exchanges.
By: kobiashi2000
25 May 2005, 05:06 PM EDT
Msg. 46233 of 46238
Jump to msg. #
BTW, the JDA can't be dissolved. If you read the treaty signed by the heads of state of both countries in 1999, both states have agreed to take unresolvable conflicts between the states to the international court of justice for arbitration and to stand by the decision of the arbitrator based in Hague. Worst case scenario this goes to arbitration and the arbitrator says either Nigeria is in the right or STP is in the right and both sides have to adhere to that decision. But, I highly doubt it will go that far.
Joe,
As the story of ERHE turns.
Two names stand alone. OFFOR,and BASS. With out, this company would not be.
Its 10:21 PM Abuja time and we have heard absolutely nothing.
You can bet your bottom dollar that if they had gotten this thing done there would have been trumpets blowing and horns blaring.
Instead we hear nothing but silence,
IMO that means they did not agree on terms and will not deliver block awards.
Wrong, Kobiashi. It may say that somewhere in the Treaty, but you can never prevent a sovereign nation from taking steps to protect its national interests as it sees fit. Moreover, the Nigerians are tired of messing around, and I think that's the bottom line. If several years down the road the Hague or the International Chamber of Commerce says Nigeria acted illegally, Nigeria will say, "So sue me."
Don't be a fool.
Joe,
The JDZ was created by an international treaty to be administered under agreed international laws. If the JDZ were to fall into a dispute, or if either nation were to attempt to act unilaterally, are you really so naive as to beleive any oil company would invest a single nickle until all disputes had been resolved?
Neither nation's interests are possibly served by an open dispute over the adminstration of the zone through any other means than those already agreed in the JDZ Treaty.
In any event I also believe that you have grossly misinterpreted Tanko's comment.
Joe, there you go with your half baked headlines again. Half truths, innuendo, and drawing totally unwarranted conclusions, and then of all things posting them as headlines as if they were facts! Clueless or new investors could be mislead and believe your slop to be actually true and make their investment decisions accordingly. That what you want Joe? Shut up already.
Interesting: Money.net shows the closing Bid and Ask at $0.702 x $0.702.
Joe,
This is a real work of art you have here. You are very talented at reading between the lines and piecing together a real catchy story. Hope you read the tea leaves correctly though, or your story becomes an editorial 'slant', if you will, vs. real news, as you have presented it.
signed,
nh
Are you going to erase this thread like the others of mine you erased?
Joe, the "Wizard of Spin".
Fire burns.
shame on Joe for being so irresponsible.
I didn't say anything about whether oil companies would invest. The Nigerians just might rename the blocks, award them and invite their indies to play. That would turn your treaty into legal gibberish both sides could argue over for the next 10 years, while revenues and profits "developed wings," as the Nigerians say. Of course, it might be in their interest to frustrate new exploration, as it can only compete with their own and add to supply, reducing demand. You can play it any number of ways without the JDA in the picture.
All of these arguments back and forth support the one conclusion:
STP and Nigeria have to come to terms or this little JDZ will not yield profits for either for many years to come.
This will be much harder for STP to deal with than Nigeria. Nigeria already has a flourishing oil business, STP does not, and if they keep on with the infighting, they never will.
That's absolutely right, 6:02, and thanks for stating it so succinctly.
Sao Tomeans are like Iraqi's. They are hot blooded people with too many factions to ever accomplish anything.
Thats why de Menezes shoould have the authority to sign off on his own and make a decision as opposed to trying to please every member of the Sao Toamen govt.
He needs to stop ruling by appeasement and take control of a situation that has spiraled out of control.
That is what being a leader is all about.
Last year in April when the nine blocks were supposed to be awarded the same pumpers on RB swore up and down how ERHC was going to go through the roof right up and probably even past the point when news came out that there would be no awards except in block one. I don't want to be left holding the bag if that happens this time so I think it's good to have a warning out there that this same thing can happen again. That is clearly what Tanko is saying. If you don't heed it or you don't believe it at least you heard it. And if the awards are granted we'll all be fine. But we won't be ignorant, either way.
Ah, the great lofty exchange of ideas with mutual respect shown to all participants. Wait, wrong place apparently!
This is obviously a very crucial meeting. Why in the hell did they start it at 3 PM. Can they get everything done in that short a period of time?
I seriously doubt it.
Post a Comment