The statement seems to be a general one that lays out principles, and it also addresses the issue of Korean oparticipation in exclusively Nigerian oil regions. The Koreans are also bid winners in the JDZ. Hee's what Daukoru said:
"The main reason why our President wanted them (the Koreans) is to invest in our downstream, which is strategically important to us and which we have had difficulties finding companies to do in the past," he said.
The statement seems to say that the Koreans will be given some leeway on prompt payments because of their importance in the development of other infrastructure in the energy sector which, pointedly, the paper says multinationals have failed to do.
More telling, though, is the sense that Nigeria is angry with the majors, and it may be fair to extrapolate from that anger a sense that they are not going to be willing to participate in the investigation fomented by the majors via Sao Tome's attorney general, who is beuing helped by the major players' favorite attorney, R. Dobie Langenkamp of the University of Tulsa's College of Law and its National Energy-Environment Law & Policy Insttuitute, or NELPI. The majors are using the investigation to force smaller companies and particularly the Koreans out of the blocks where they won percentages. Read this carefully:
"Our people must not be deceived into thinking that we will compromise our national interest for any other interest. Oil majors have been operating in this country for decades. They have never been involved in anything other than [to] produce oil and gas. If a partner comes and wants to be involved in the development of Nigeria's infrastructure the government is bound to listen to him," he stated.
Generally, the article seems to bode well for ERHC Energy, which is being carried to first oil by its partners, Pioneer Natural Resources and Noble Energy, while it presents a challenge to some of the smaller local firms who pieces of Blocks 2 through 6 on May 31 of this year.
Here is the article from today's Vanguard:
Govt restates commitment to revoke dormant oil blocs
By Yakubu Lawal, Asst Energy Editor
THE Minister of State for Petroleum Resources, Dr. Edmund Daukoru, has stated that government will continue to review the work programme on the nation's oil blocks with a view to retrieving the non-performing oil blocs.
Specifically, Daukoru noted that government will retrieve any oil bloc whose operators are unable to meet the specified work programme by the oil industry authority - department of petroleum resources.
"The important thing is that the policy is there, and we intend to implement it. Periodically, we will take a census of blocs that have not been operated for long and then signal and take them back," Daukoru stated.
According to him, except the authority is convinced that the operators' work programme is reassuring, the authority will not leave such bloc but take them back into the national portfolio.
Daukoru stated that the introduction of the "right of first refusal" in the 2005 oil bloc licensing round was done specifically to protect the national interest.
"Our people must not be deceived into thinking that we will compromise our national interest for any other interest. Oil majors have been operating in this country for decades. They have never been involved in anything other than produce oil and gas. If a partner comes and wants to be involved in the development of Nigeria's infrastructure the government is bound to listen to him", he stated.
According to him, there is no irrevocable commitment in the blocs awarded so far, pointing out that after a certain time to be agreed between the parties, the government does not see the railway, the gas pipelines, the mega power generating plants, shipyard, government will revoke the blocs.
"Oil blocs are not things that walk away. In a period of say two years, there is nothing that happens in the oil bloc that will prevent the government from taking it back and give to somebody else that is ready to meet the national aspirations," Daukoru said.
He said some issues will still be revisited on the 2005 licensing round, stressing however that the exercise was carried out in the national interest.
The minister pointed out that the local content vehicle concept also achieved the desired result as those indigenous companies that demonstrated capacity to perform also got what they wanted.
Daukoru said the ministry did the nation a tremendous service by asking the operators to open up the block for others rather than just first sitting on them.
"By putting them (the blocs) back in the basket, we are getting the hands of signature bonuses, which will go a long way in our circumstances", he stated.
He noted that since 2000, government has awarded about 70 blocs in different basin as part of its strategy to boost investment in exploration and production companies and ultimately to increase the national oil reserve whose target has been set at 40 billion barrel by 2010.
Meanwhile, the government has earned a total sum of $2.63 billion from the award of oil blocks to local and foreign companies at the just concluded 2005 Bid Round.
Briefing newsmen in Lagos after the bidding round exercise, Mr. Tony Chukwueke, the director, Department of Petroleum Resources (DPR), said all the winners were given a deadline of October 2, 2005, to show proof of their ability to pay their various signature bonues offered for the blocks, through the presentation of bank performance bonds.
The deadline has been extended till Friday this week.
Chukwueke said the Production Sharing Contract (PSC) agreement that will govern operations in the blocs would be signed only with awardees that presented the bank guarantee.
According to him, the demand for guarantee was first, to be certain that the winners have the money they quoted ready and more importantly to correct the impression currently circulating within the oil industry that the Nigerian government had used local firms to raise the price of the blocks.
"We have to ensure that we are not just using Nigerians to impose unrealistic prices for the blocs we have offered. To ensure that indeed these Nigerians are serious and can pay the money they put on the table", the DPR director said.
"If by the time we had set for them, that is October 2, which is the PSC signing date according to the guidelines, they will have to show us proof that they can pay that signature bonus. And then 30 days after the signature bonus must be with government", he added.
The results of the bid conferences released recently showed that 44 blocs out of the 77 blocs on offer were allocated.
A breakdown showed that investors won five blocs in the Anambra Basin, two in the Benue trough, while four blocs were won in the Chad Basin.
Investors also snapped up eight blocs in the deepwater region. All the six blocs put on offer in the onshore Niger Delta were snapped up as well as the six in the Continental Sheif.
Chukwueke said that the contentious deepwater blocks, OPLs 321 and 323 awarded to the Korean National Oil Company (KNOC) were done in line with national interest of the country.
"The main reason why our President wanted them (the Koreans) is to invest in our downstream, which is strategically important to us and which we have had difficulties finding companies to do in the past", he said.
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