Morgan says there allegations of "duress" against someone in Block 4, and notes that "US investigators backed by Sao Tome" have given JDA Chairman Carlos Gomes a hard time on that account.
The article also posits JDA approval as a future event, but the agency published a press release on its Website last week - after Morgan's article went to press - announcing they had approved the Addax substitution for Noble. Although Addax, a subsidiary of oil and mining firm Addyx & Oryx, has a corporate charter from Curacao, its operation headquarters in Geneva, Switzerland, and Morgan notes that Addax is a Swiss company; it has long experience and wide interests in Africa. Addax & Oryx, with about 900 employees, is headed by a Frenchman, Jean Claude Gandur.
Morgan also indicates, without elaboration, that Noble had failed to do due diligence work on the "beneficial interests" of a small independent awarded a 5 percent interest in Block 4, Godsonic Oil.
Here is the Upstream article:
Addax to enter into JDZ play
ADDAX Petroleum has made a dramatic last-minute entrance into Block 4 in the Joint Development Zone managed by Nigeria and neighbouring Sao Tome, writes Barry Morgan.
Noble Energy had been awarded operatorship earlier, but the mantle will now pass to the Swiss explorer if a memorandum of understanding signed on 25 October is approved by the Abuja-based Joint Development Authority.
Production sharing contracts and joint operating agreements have been held up for all the blocks awarded under the JDA's second round because of Noble getting cold feet.
Block 4 also hosts ERHC Energy, which enjoys a substantial element of preferential rights without the obligation to pay any part of the signature bonus and was instrumental in bringing both Noble and Pioneer Natural Resources into the JDZ.
The JDA also awarded junior equity to Nigerian independent Godsonic but Noble's initial due diligence failed to reveal the full range of beneficial interests.
Critics of JDA chairman Carlos Gomes' handling of the second round claim that signature has not been reached on any block, despite lengthy talks.
US investigators backed by Sao Tome attorney general Adelino Pereira are looking into allegations of duress and mismanagement of the second round and have given the JDA a hard time recently, putting Gomes under severe pressure.
ERHC had already lost its first heavy hitter Devon Energy and with Noble gone it has now lost a second.
Nonetheless, it is claimed Addax's acquisition of 35% equity in Block 4 will allow the JDA to keep to its timetable in getting all Round 2 licences blocks 2, 3, 4, 5 and 6 signed off before the end of the year.
The JDA said that timelines for PSC signatures next week and residual joint operating agreement negotiations will be adhered to by all awardees in all blocks.
It also said that Addax already had a memorandum of understanding with local independent Overt Ventures as its technical partner for which it was assigned a 5% interest in Block 4.
For the process to move forward, Addax must agree to pay a $90 million signature bonus on 9 December and commit, like Noble had, to a three-well programme in the first four-year exploration period.
Update, 2:21am, 11/07/05: The Guardian of Nigeria has a story this morning on the deal, too, but it lacks anything new. You would think the best Nigerian newspaper would be able to get some original information on a development directly tied to their nation's financial future, but you'd have thought wrong:
The Guardian of Nigeroa on our deal:
Addax, ERHC Energy form consortium on joint zone block four
By Yakubu Lawal and Taiwo Hassan
IN a bid to strengthen its operational base in the Joint Development Zone (JDZ) in Nigeria, Sao-Tome and Principe in the Gulf of Guinea, Swiss based oil multi -national, Addax Petroleum has secured the approval of the Joint Development Authority (JDA) to replace Noble Energy in the consortium pact between ERHC/Noble Energy in Oil prospecting Bloc 4.
A statement made available to The Guardian by to he JDA in Lagos, however, states that the approval granted by the authority is subject to conditions
- that Addax will be designated operator in the consortium,
- that the consortium accepts all the commercial and technical terms of the award of 35 per cent equity interest to the Noble/ERHC consortium and this will include payment of $90,000,000.00 signature bonus and a minimum work programme commitment of three wells during the first exploration phase of four years, and
- that the ERHC-Addax consortium accepts to be committed to the present JDA production Sharing Contract (PSC) timeline, which the former consortium had been working towards and also an immediate commitment to jump-start Joint Operating Agreement (JOA) discussion with the other equity holders in Block 4.
Before now, Noble Energy has signified its intention to withdraw from the group.
Additional information revealed that the Memorandum of Understanding between Addax-ERHC was signed on October 25,2005 and that the parties were already in the process of negotiating a participation agreement.
According to JDA, Addax Petroleum has a subsisting MOU with Overt Ventures as a technical partner for which they were assigned a five per cent equity interest in Block 4 in the 2004, JDZ Licensing Round.
The JDA assured all the stakeholders that the PSC/JOA discussions were very much on course in all the blocks, pursuant to the conclusion of the JOA/PSC negotiations within the timeline.
"Noble informed the JDA and ERHC Energy of its decision to withdraw from participating in block Four and from the ERHC/ Noble consortium on October 24, 2005. The ERHC/Noble consortium was awarded a 35 per cent in Block Four and designated as the operator May 31,2005," the statement adds.
Addax Petroleum is an international oil and gas exploration and production company currently focused on West Africa. The company commenced operation in Nigeria in 1998 when it signed two PSC with the Nigerian National Petroleum Corporation (NNPC) for Oil Mining Licenses (OMLs 123-offshore and 124-onshore) operated by Addax Petroleum Development (Nigeria) Limited and OPLS 90 and 225 (offshore) operated by Addax Petroleum Exploration (Nigeria) Limited, both subsidiaries of Addax Petroleum NV, a subsidiary of Addax and Orxy Group.
Both PSCs are operated 100 per cent and the company currently produces on the average 50,000 barrels per day and with additional production coming from Okwori Field, the company's production will be in excess of 80,000 barrels per day for export before the end of this year. The company has already set 100,000 barrels per day target for early 2006.
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