No Block 4 PSC Until 2006, Dow Jones Reports

In a Nov. 21 story that apparently ran in the Business Day Nigerian newspaper a week ago but never was seen by most investors, Dow Jones News Service reporter Norval Scott says one company in Block 4 believes the PSC won't be signed there until 2006.

The article solves the mystery - it was one to me, anyway - as to why Dow Jones did not do a follow-up on the Reuters story that moved earlier on the same topic.

However, even the Reuters story ran before a story in ThisDay Online on Nov. 17 reported that the Joint Ministerial Council of the Nigeria-Sao Tome and Principe Joint Development Zone had signed off on the substitution of Addax Petroleum for Noble Energy in the Block 4 operatorship consortium. Addax will be the new operator.

Here is Norval's story, well-researched and well-written, as always:

November 21st, 2005

Editor's Note: This story actually ran on the Dow Jones wires on Nov. 15, six days before it ran in ThisDay Online. A Dow Jones piece on the Addax issue had also run on Oct. 28, before the Reuters story, but was not widely seen by ERHC Energy investors.
Nigeria-Sao Tome deal billed for 2006

The petroleum-sharing contract for Block 4 in the Sao Tomean-Nigerian Joint Development Zone likely won’t be signed until 2006, a company involved in the block said.
Norval Scott

"Negotiations to finalize the production-sharing contract and the joint operating agreement are progressing. Signature of the PSC and JOA is expected during 2006," Centurion Energy International, a Canadian company with a 7.5 per cent stake in Block 4, said in a statement accompanying its third-quarter results.

The Joint Development Authority, the JDZ’s operating body, said earlier this year that the PSCs for the region’s most recent licensing round were due to be signed in this month. Five blocks, including Block 4, were made available in the round.

However, negotiations on Block 4 have been delayed by the withdrawal of Noble Energy (NBL) from the block’s operating consortium last month.

Houston-based ERHC Energy (ERHE), which held a joint 60% operatorship of the Block with Noble Energy, has enlisted the Swiss company Addax Petroleum to replace Noble, and the JDA is believed to be considering that switch at present.

Other partners in the block include the Nigerian firms Conoil and Godnic.

The JDZ is an offshore maritime zone, owned jointly by Sao Tome and Principe and Nigeria on a 40:60 basis.