Dr. Edmund Daukoru swiftly rejected a 71-page report from Sao Tome attorney general Arlindo Pereira Tuesday, saying it was filled with unsubstantiated allegations that have been repeatedly examined and were entirely generated by Sao decisions Sao Tome's leaders made years ago. The Sao Tome Minister of Justice said last week Pereira was engaging in "abuse of power" and western bang-bag" justice. Photo: Punch of Nigeria
Daukoru's reaction was the one we expected from Nigeria. Here is the Reuters story:
“My first reaction is just to reject the report in its
entirety” says Edmund Daukoru
By Tom Ashby
KUWAIT, Dec 13 (Reuters) - Nigeria's top oil official questioned on Tuesday the durability of a treaty with Sao Tome after the island nation called for a U.S. bribery probe into their joint award of oil licences.
Nigeria and Sao Tome were due to sign five oil exploration contracts with foreign investors this week, but Sao Tome's attorney-general said the deals may be void because of indications that U.S.-based ERHC (OTC BB symbol: ERHE) made improper payments to Sao Tome officials.
ERHC said it had no contact with officials during the licensing process.
Nigerian Minister of State for Petroleum Edmund Daukoru told Reuters in an interview that the report was based on poor information and a product of internal wrangling at the top of the Sao Tome government.
"My first reaction is just to reject the report in its entirety. They cannot come after the event to condemn because of their own internal politics," Daukoru said.
Sao Tome was struggling to cope with a system of government where the president is from one party and the prime minister from another, Daukoru said.
"I see a basic inability to weave a national consensus even on small issues. We are being made to appear as if we are forcing things on them."
Sao Tome entered into an agreement with ERHC many years ago giving the company preferential rights to equity in Sao Tome's oil acreage and valuable waivers in exchange for technical and financial services. The company was later acquired by a Nigerian businessman and floated on a U.S. stock market.
The deal acquired new significance when the tiny island nation signed a treaty with Nigeria in 2000 to put aside a border dispute and develop the offshore oil resources jointly.BIG WINNER
ERHC was the biggest winner in May's joint exploration licensing, winning joint control of two blocks and a stake in three others. Its share price has risen sharply on hopes of a big find. Other companies involved in the licensing included
Addax, Devon DEV and Anadarko APC.
U.S. giant Chevron CVX had previously won drilling rights on another joint block.
The report said that Sao Tome would lose $58.6 million because of waivers accorded to ERHC, and that the rights given to the little-known company were so favourable that they might violate its law by alienating control of its natural resources.
It called for an investigation by the U.S. Securities and Exchange Commission into the alleged payments.
Daukoru said that if Sao Tome wanted to amend or withdraw benefits it accorded to ERHC, it was free to do that unilaterally, but it should not endanger the whole process.
"Even after the round, whatever equity belongs to ERHC they can expropriate or buy, whatever," Daukoru said.
Daukoru said the attorney-general's report falsely accused Nigeria of being overbearing in negotiations with foreign investors.
"For anybody in Sao Tome to be holier than thou really surprises me. If they were to operate that place alone, they would get worse things than what we got working together. They have benefited from our experience," Daukoru said.
Daukoru said the contracts were negotiated over a period of several months by a joint development authority headed by a Sao Tomean, and that Nigeria had conceded several points to Sao Tome to get a deal signed.
"We have entered a treaty with them which in hindsight, one wonders ... In a case where every issue has to be dealt with in conference with the two countries, I don't know how long it will work. But having entered into it and until the treaty is revised, we have to show patience."
(Editing by Brian Killen; Reuters Messaging thomas.ashby.reuters.com@reuters.net; Lagos newsroom; +234 1 263 1943))
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