The posts are believed to be faithful reporting of what the JDA sources say, however, so our warning of caveat emptor should not be interpreted as a slap at Mark.
According to his source at the JDA, with whom he speaks on a regular basis, the JDA plans to issue a press release on the current state of the PSCs "tomorrow or next week."
We suspect the source is correct. The PSCs were due to be finished by now and they probably are, except for Block 4, where Anadarko Petroleum and ExxonMobil have fought through clandestine means to block an award to ERHC Energy and Addax Petroleum as the operating consortium.
Anadarko tried to bring ExxonMobil into the bidding after it had closed and was rebuffed by the JDA, UpstreamOnline reported. ExxonMobil had two 25 percent equity options it could have exercised in any of the blocks on offer, but chose not to use them. Meanwhile, the Oklahoma-based Anadarko made an offer of $90 million for the block but was unwilling to commit to a substantial work program.
At the prodding of the JDA, ERHC and Noble Energy matched the Anadarko bid and offered a far more compelling work program and won operatorship when awards were announced on May 31. The International Monetary Fund, according to UpstreamOnline's Barry Morgan, vetted the award, or so he reported for the leading oil industry trade newspaper.
Noble dropped out after the non-ERHC independents in the block seemed unlikely to pay their share of the freight for production costs to first oil. Addax Petroleum stepped in for Noble and quickly won approval from the Nigeria-DRSTP's governing body, the Joint Ministerial Council.
To support its bid, Switzerland-based Addax presented an IPO for $400 million on the Toronto Stock Exchange, revealing in its prospectus that it would give ERHC Energy 25 percent more of the block, an $18 million payment and full carry to first oil. The stock rose to $0.45 from $0.32.
Frustrated again, the multinationals moved Sao Tome Attorney General into position, armed with what appeared to be a damning report but with scant facts, or "no concrete evidence" as a Wall Street Journal reviewer, Chip Cummins of the WSJ's London bureau put it.
A story Monday, released a half hour after offices in Abuja and Sao Tome closed for the day, on the AG's report by Zoe Eisenstein of Reuters failed to provide any context and so shot holes in ERHC's share price, dropping it from $0.45 to $0.27 in a matter of hours on a whopping 12 million shares of volume.
The report should be "rejected in its entirety," incoming OPEC chairman Dr. Edmund Daukoru of Nigeria then told Reuters on Tuesday from Kuwait. The Reuters piece eased pressure on the stock and it rose to $0.36 at Tuesday's close.
Ever since losing to ERHC, the two multinational giants have used their influence throughout the world to take the block back, but have failed to gain cooperation from Nigeria, where they are widely disliked.
They apparently found it easier to work through Sao Tome and Principe, a country of 180,000 where poverty is widespread; newspaper reports say luxury vehicles suddenly apeared all over the island as the billion-dollar babies sought to regain control.
ExxonMobil, which got pretty much the same deal from Sao Tome at the same time as ERHC for the same kind of work, is accused of racketeering under the Foreign Corrupt Practices Act in neighboring Equatorial Guinea in ongoing hearings before the Senate Commerce Committee.
The Senate Energy Committee's Republican chief counsel, Judy Pensabene, is married to Anadarko VP for Governmental Affairs Greg Pensabene, and both went to Tulsa U. School of Law with lead Sao Tome investigator R. Dobie Langenkamp, so that looks like it may be the next venue where giant footsteps appear.
But the nation's Justice Minister, Elsa Pinto, condemned her rogue Procurador General on Dec. 1, before the report was released, saying he had frustrated interagency relations within the government, abused his power and was conducting "western bang bang" justice, according to the country's two principal news organs, Tela Non and Vitrina.
That denunciation failed to reach several reporters who have since written about the report, depriving them of context.
Now, it appears, PSCs are going ahead in most blocks until some outcome of the Block 4 battle is reported.
Before we get to the update, here is the latest from Lusa. Pay careful attention to what Carlos Neves doesn't say:
To me, what he doesn't say is that the report presents factual evidence of wrongdoing. His committee on oil affairs probably had better and more information when it approved the awards late this past May.
Sao Tome: Oil awards probe 'merits careful analysis' - Oil Commission chief
Sao Tome, Dec. 14 (Lusa) - Sao Tome and Principe's parliamentary oil commission Wednesday began analyzing an official report on alleged irregularities in the awarding of oil licenses in the Joint Development Zone (JDZ) shared with Nigeria and said it might place the affair before the full legislature.
The oil commission's chief, Carlos Neves, told Lusa his specialized body had discussed the report, prepared by Attorney General Adelino Pereira, would meet again Monday and was considering taking it to a plenary session of parliament.
"It is a matter that merits a very careful analysis", Neves, who serves as the 55-seat legislature's deputy speaker said, adding that his commission would analyze the report with "great precision".
"If justified", the opposition lawmaker said, the report would be taken to the full National Assembly to assign responsibilities and, eventually, to correct any failures in the oil exploration awards process.
Here is the text of markgovols' update:
****Update****
Just spoke to a JDA Official in Nigeria. First off, he told me that the Attorney General Sao Tome comments in the Reuters article is all for politcal show.
He said there are Parlimentary elections soon and that all this crap is political shenanigans.
He reiterated that EHRC's rights are solid and that long ago Sao Tome had "extensive consultations" with all parties involved and that "new guidlines were issued and everyone agreed to them." So, basically nothing can or should be changed now. What's done is done. Source said to expect an Update (Press Release and on JDA website) from JDA either tomorrow or next week.
PSC's
Source told me that 4 of the PSC's are DONE. DONE. FINISHED. I asked when PSC's would be signed and was told they will be signed "as soon as possible" and that everyone wants this done ASAP. So before XMAS is still possible. Was told that "Remarkable progress has been made."
As ALWAYS, take this update for what it's worth and better yet call the JDA yourself.
Meanwhile, the Portuguese news agency Lusa, which has been consistently biased in its reporting toward the ruling party in the Sao Tome government at the expense of President Fradique de Menezes' party, reported yesterday - as we reported here on Monday - that hearings began Wednesday and broke off until Monday on the probe report.
The short session was inconclusive, apparently, and I have no doubt lawmakers are concerned that a rogue Attorney General from the other party has set them up to fail disastrously.
Here is the Lusa report:
Sao Tome: Lawmakers study official probe on alleged oil corruption
Sao Tome, Dec. 14 (Lusa) - A parliamentary committee in Sao Tome and Principe begins examining on Wednesday a report into alleged irregularities in the award of oil licenses in the Joint Development Zone (JDZ) shared by the archipelago and Nigeria.
Carlos Neves, deputy speaker of parliament and head of the oil affairs committee in the legislature, said MPs would study a report delivered to the islands' president, government and National Assembly by the Attorney General's office into the second round of licensing for five offshore oil blocks.
The Reuters news agency reported this week that the official report has uncovered strong evidence that the American registered and Nigerian-controlled ERHC oil firm made irregular payments to officials and their families during the award of the JDZ blocks.
ERHC was awarded control of two of the five blocks in the Gulf of Guinea and shares in the other three. Production sharing contracts to operate these blocks were due to have been signed this week by Sao Tome, Nigeria and energy companies involved.
The alleged improper payments violate Sao Tomean law and make these contracts invalid, Reuters reported the official probe as stating.
The Attorney General's office will now "refer the matter to the US Department of Justice and Security and Exchange Commission to seek their assistance in investigating whether violations of American law have occurred," said Reuters.
When the investigation into possible wrongdoings in oil contract awards was launched in Sao Tome, the country's attorney general said he would seek cooperation from Nigeria in the process.
The Abuja authorities, however, have not cooperated in the investigation and Nigeria's top oil official said Tuesday that the call by Sao Tome for a US corruption investigation could jeopardize the two countries' oil treaty.
RCN/CJB.
Lusa
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