The rejection was disputed by an Addaz executive in his statements to Platts, which broke the story, and is the latest in a series of hard blows against ERHC Energy, which has rights guaranteed by treaty in all five of the blocks offered in the 2004 Licensing Round.
Anadarko's chief of governmental relations, whose wife is general counsel of the Senate Committee on Energy, has apparently used a $300 million debt reduction plan proposed by the World Bank to persuade the tiny nation-state of Sao Tome to probe the award of Block 4. The first casualty of the probe was Noble Energy, and Addax is lined up to be the second.
The probe is headed by an R. Dobie Langenkamp, a two-time Dept. of Energy official and an old college classmate of the couple, Greg and Judy Pensabene.
The latest sign of trouble came Monday, when the Joint Development Aithority, which administers the JDZ under the direction of a joint ministerial council with representatives from both nations, removed its Website a press release saying it had accepted and approved a Memorandum of Understanding between Addax and ERHC under which Addax would replace Noble.
It then removed two "timeline" documents, each of which carried a different timeline for the same events.
Then ThisDay Online revealed late Monday that Hallmark Bank, whose CEO is under arrest, had been unable to produce the Block 1 signature bonus paid to Nigeria, some $58 million.
Behind these machinations are the powerful oil companies that control the National Energy-Environment Law and Policy Institute (NELPI) at the University of Tulse College of Law.
The NELPI advisory board and executive committee are heavily peopled by ExxonMobil and Anadarko executives, with six Exxon and four Anadarko attorneys currently serving.
The Pratts "leak" of the JDA developments may be authentic information, but there is a good chance that the information is designed to further disrupt the awards process and stop the Joint Devel;opment Authority from completing the awards process and obtaining some $400 million in signature bonus fees.
Anadarko offered $90 million for operatorship of Block 4, where it tried to bring in ExxonMobil as a joint venture partner but was rebuffed. The JDA found the slow-go drilling schedule of Anadarko unacceptable, and gave the block to ERHC/Boble Energy on condition that they pay the same fee and mount a much more vigorous effort, requiring them to drill three wells in four years.
Then Langenkamp went and took control of the Sao Tome probe, contradicting the Atty. Ge. of Sao Tome, the ostensible person in charge when reporters asked if there was any evidence of wrongdoing. The attorney general said there was not, but Langenkamp said there had to be an investigation. The Sao Tome government was powerless to stop it as virtually all the principals in the Sao Tome government are potential subjects of the probe.
Then President Olusegun Obasanjo's wife was apparently murdered at a plastic surgery clinic in Spain and a plane with key fraud investigators was brought down in Nigeria, both on the same day; neither bodies nor the black box and cockpit voice recorder from the plane were recovered. Those events have apparently moved President Obasanjo to make peace with ExxonMobil, which has been quietly warring with his anti-corruption government, and developments in the JDA followed soon thereafter.
Most Nigerian and all American news organizations have shied away from the huge changes going on as majors and minnows fight over 3.5 billion barrels of oil said to be waiting in the tranquil waters of Block 4. The JDZ's nine blocks may contain a total of 14 billion barrels of oil, according to the Houston Chronicle.
Here is the limited account of these events from Platts, posted on Raging Bull:
Posted by: ztock (the poster is a well-known ERHC "basher")
In reply to: None Date:11/9/2005 10:55:58 PM
Post #of 13145
JDA rejects Addax replacement of Noble - source.
8 November 2005
11:03 AM
Platts Commodity News
English
Copyright 2005. Platts. All Rights Reserved.
Cape Town (Platts)-8Nov2005/1058 am EST/1558 GMT The Abuja-based Nigeria-Sao Tome Joint Development Authority managing a deepwater licensing round in the Gulf of Guinea has rejected Addax Petroleum's bid to replace Noble Energy as Houston-based ERHC's partner and operator in Block 4, an industry source told Platts Tuesday.
Addax Petroleum managing director Jim Pearce said he had "heard something about that," and would know more later in the day. A spokesman for Addax said he was unaware of the decision, while the JDA's spokesman said he had not yet seen "anything official." The JDA accepted a Memorandum of Understanding signed by Addax Oct 25 to replace Noble as a partner in the block, subject to certain conditions, including the consortium's commitment to pay its $90-mil signature bonus and to drill three wells during the first exploration phase of four years.
Pearce Monday said the JDA had "officially approved" its replacement in the Block 4 consortium but that details were still being worked out.
"At this point of time we just have a memorandum of understanding between ourselves and ERHC. But we do have official approval from the JDA to replace Noble as operator," Pearce told Platts on the sidelines of a Global Pacific oil and gas conference in Cape Town. ERHC, which enjoys preferential rights without the obligation to pay any part of the signature bonus, was awarded a 60% equity stake and operatorship of Block 4 with Noble in May. The other partners, Nigeria's Conoil (20%), the pairing of Nigeria's Hercules and Overt (10%), Centurian and Addax (5)% and Nigerian minnow Godsonic Oil and Gas (5%), agreed to pay a signature bonus of $90-mil for the block.
The JDA last awarded five blocks in June last year after several delays due to wrangling and accusations of corruption between the countries.
The JDA has since been criticized for stalling talks on production sharing contracts for Blocks 2, 3, 4, 5 and 6 in a second licensing but last week said the PSCs would be signed off before the end of the year.
Addax Petroleum, which is strongly focused on Africa and whose principal upstream operations are in Nigeria, expects to raise its production from 80,000 b/d to 100,000 b/d by mid 2006, Pearce said. Proven and probable reserves of Okwori, which it acquired in 1998 after Ashland pulled out of Nigeria, are estimated at between 69-to -186-mil bbl, while operating costs have dropped from $12/bbl to $5.4/bbl in 2003, he said. The company's CEO Jan Evert Mulder, who was scheduled to give a speech at the Cape Town conference on Thursday, quit his position last week.
NIGERIA ARRESTS HALLMARK BANK BOSS Nigeria's Economic and Financial Crimes Commission last week arrested Hallmark Bank's chairman and chief executive, Marc Wabara, in connection with $58-mil in funds belonging to the Joint Development Zone, Nigeria's ThisDay newspaper reported Monday. Hallmark Bank has been shut down by Nigeria's central bank. "The money, Thisday gathered, was placed in fixed deposit account with Hallmark Bank by JDZ but could not be produced on demand," it said.
Officials at Hallmark Bank, a founding member of the First Consolidated Bank, confirmed that Wabara was being quizzed for what they described as "some operational issues," the newspaper said. The twin-island state of Sao Tome and Principe, which has a population of about 170,000, signed an agreement with Nigeria in 2001 to split the revenue from any oil found in their shared offshore waters.
-Jacinta Moran, jacinta - moran@platts.com.
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