ERHC Bids In Nigerian EEZ; Offor May Seek Other Stakes

ERHC Energy has "at least one bid" on blocks offered in the Nigerian Exclusive Economic Zone, and ERHC chairman Sir Emeka Offor may be teaming with local companies to gain "stakes up to 10 percent in available blocks under provisions designed to promote local content and the growth of indigenous capacity," ERHC On The Move has learned.

Until now, there had been much speculation but no evidence the company bid in the Nigerian EEZ, where a host of companies are seeking the best of dozens of blocks offered onshore, near-offshore and in deep water.

A knowledgeable source speaking on background dismissed claims of an imminent buyout of the comapny, however. certainly, any rumours of a buy-out seem all to come from the U.S. - and mostly from investors rather than industry people," the source said.
"But, the source added, "I would have thought recent events in the region would strengthen ERHC's hand."

The past week has been flooded with images of all that is worst about Africa, the source noted, all the elements of the kind of extreme political risk and uncertainty that puts off investors - starving children in Niger; military coup in Mauritania; disputed elections in Guinea-Bissau; arbitrary cancelleation in [the Republic of] Guinea of an American oil company's license; ex-rebel leader and Sudan Vice President John Garuna dies in a mysterious helicopter crash, prompting violence and renewed crisis there.

"The relevance for potential and existing ERHC investors is that ERHC has already been exposed to much of what is typically regarded as most risky in this volatile region - and emerged with a very good position endorsed by all stakeholders. Disputed elections; coup plots; corruption allegations; contract disputes; political scandal; ERHC has faced them all and come through with everything it could have hoped for.

"So, investors have far less to worry about that anyone involved in Hyperdynamics, White Nile or Equator, although as with all these kind of companies with no revenue, the big question is whether or not they will actually find something big. A couple of months ago, it became clear Regal had not - and collapsed. Something similar happened in Nigeria with Abacan in the late 90s.

Meanwhile, our source said, "There are several companies that appear confident that there are substantial reserves in the JDZ. f For those companies, I would have thought ERHC's position must seem attractive, although Emeka Offor is perhaps not the kind of person with which they would by choice wish to deal.

Not many industry people in the region believe that ERHC will exist in its current form in a couple of years. But the when, where and how is probably something that will probably get worked out in the United States."

Editor's Note: Several alert readers and our source all reported that I had mistakenly added the word "Equatorial" to the source's "Guinea." Just shows you how a know-it-all goes wrong! Sorry to all for introducing this error.