ERHC On The Move could not access ThisDay Online between 1am and 2am EST this morning and so did not see the article earlier. It was posted to Investor's Hub by Homeport on the ERHE message board.
The XOM bid, part of a late-arriving package from Anadarko Petroleum, lost to a consortium led by Noble Energy. Addax Petroleum has since replaced Noble in the operatorship consortium in which ERHC is a significant partner.
While the JDZ and Block 4 are not mentioned in the article asnd the majors have had substantial physical security issues at the onshore facilities in Nigeria, the subtext of the visit was clearly concern about XOM's loss of a hugely valuable entitlement to two 25-percent choices in any of the last five blocks on offer in Round 2 of the JDZ licensing regime.
The oil giant has been unable to move the Nigerian government on Block 4 and apparently sent the bankers to plead its case under the aegis of Total, a sometimes partner.
It appears that their aegis lost, however. It is not known to what extent President Obasanjo may have capitulated, but he has not been pleased with XOM's performance on a number of promises over the past decade.
Here is the article outlining the meeting with more two dozen powerful U.S.- and European banks by Mike Oduniyi, a veteran reporter on his nation's oil business, in ThisDay Online:
Foreign Investors Express Concern over Security
By Mike Oduniyi, 11.21.2005
Foreign investors who have committed huge funds into the country’s oil and gas sector have expressed concern over the growing fears of insecurity in the country and its implication on their investments.
THISDAY gathered that about 24 top flight financial analysts, representing the world’s major investors from countries including the United States, Britain, France, Belgium and Switzerland, were in the country last week and held talks with the Federal Government.
The analysts represented major investment companies who are big lenders to many Nigerian mega oil and gas projects, namely Merrill Lynch, Societe Generale, Bank of America Securities, Credit Suisse First Boston, Morgan Stanley, UBS Investments, Goldman Sachs, J.P. Morgan and Management, and Lehman Brothers.
An official close to the meetings, held with President Olusegun Obasanjo and other senior government officials Thursday in Abuja, disclosed that the investors expressed deep concerns bordering on the safety of their investments already committed into oil and gas projects including the Liquefied Natural Gas (LNG), the Natural Gas Liquids (NGL), the Amenam/Kpono offshore oil field development and the Akpo deep offshore project.
“The investors principally came to evaluate what has been happening to their investments, if they are safe, and also to get the needed assurance to see if they will put more money in future projects in Nigeria. They needed assurance of a stable polity.
“For instance, they have been following the Nigerian government’s pronouncements on full commercialisation of the country’s huge gas resources and also raising oil reserves to 40 billion barrels by 2010. They said that they are worried about the crises in the Niger Delta,” the official added.
Credit Suisse First Boston (CSFB), for instance, signed an agreement with the Nigerian NNPC/ExxonMobil joint venture last year, to lead a consortium of Nigerian banks in raising about $1 billion for the second phase of the Oso Natural Gas Liquids (NGL).
Most of the investors are also on standby to provide funding for the NLNG trains 7 and 8, the Amenam/Kpono gas gathering project, as well as the Usan deepwater project.
A statement from French oil firm, Total, weekend said that it played host to the investors who also visited the Amenam/Kpono oil field, which is contributing 125,000 barrels per day to Nigeria’s total oil production, and the Nigerian Liquefied Natural Gas (NLNG) plant at Bonny, Rivers State.
“The financial analysts had gone to see President Obasanjo in the company of Total’s Chief Financial Officer, Robert Castaigne; President, Exploration and Production Christophe de Margerie; Senior Vice President Africa, Exploration and Production in Africa, Jean Privey; Managing Director of Elf Petroleum Nigeria Limited, Jacques Marraud des Grottes and other top company executives,” the statement reads.
The Total statement quoted Obasanjo as saying that his administration was committed to the enthronement of transparency and accountability in the oil and gas industry, as part of its anti-corruption campaign.
Obasanjo also said his government had pursued the policy of monetisation of gas instead of flaring it, expanded the country’s oil and gas reserves and increased production capacity.
The statement said further that the Minister of State for Petroleum, Dr. Edmund Daukoru who also hosted the investors also assured on the government’s preparedness to provide security in the Niger Delta.
He said that the Federal Government has adopted strategies to expand the playing field and encourage more investors in the oil sector.
Meanwhile, Daukoru, in another statement weekend stated that the Federal Government was not about to review the memorandum of understanding it entered into with the China National Petroleum Company (CNPCO) and Korea National Oil Company (KNOC).
The Nigerian government had come under pressure from oil majors over the grant of preferential rights to CNPCO and KNOC in the recent awards of oil blocks. The two Asian firms had pledged to undertake downstream projects in Nigeria.
“We wish to state for the records, that at an early stage in this process, some of the majors had offered consultancy services only, which Government found inadequate to address the necessity for a fully committed core investor.”
“We would also like to make it clear, that should there be a review of this strategic understanding with the Chinese and Korean Oil Companies, all interested parties would be made aware of such an outcome in line with Government’s commitment to openness and transparency in all its activities in the oil and gas sector,” it added.
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