So far, today's cornucopia of good news had driven the share price up $0.07 on violume of 3,249,667 shares, with Buys of 2,121,830 and Sells of 890,317 as of 3:32pm EST. The price has gone from $0.345 at yesterday's close to $0.415 now.
Rather than recap a lot of old news concerning this sad affair, here is the Reuters report:
JDZ awards stand, though flawed
By Zoe Eisenstein
SAO TOME, Dec 9 (Reuters) - Sao Tome has found irregularities in the award of oil exploration contracts in waters it manages jointly with Nigeria but it cannot cancel the deals without Nigerian agreement, Sao Tome's president said.
An inquiry by the country's attorney-general showed correct procedures were not followed in a second licensing round which awarded five offshore blocks in the Joint Development Zone (JDZ) shared by the two neighbours.
The round, which followed delays, squabbling between the two countries and allegations of corruption, awarded the blocks in May to U.S. and Nigerian companies.
The president said he did not have the power to order the cancellation of the flawed contracts, despite the attorney-general's findings.
"If we cancel the licensing round, we must also obtain the agreement of the Nigerian side. We cannot cancel alone," he said in an interview with Reuters.
The companies involved included U.S.-based ERHC Energy (ERHE), which won the joint operatorship of two blocks and stakes in the three others.
Controversy over the round has focused on ERHC, which de Menezes said was U.S.-listed but owned by Nigerian capital.
Attorney-General Adelino Amado Pereira said on Friday that procedures used to select the companies were "seriously flawed, and did not meet the minimum international standards for a licensing round."
Some companies which received exploration blocks had little or no qualifications, both technically and financially, the attorney-general said in a statement.
President de Menezes said such irregularities had led to a loss of income for Sao Tome which he estimated at "about $58 million to $59 million."
"We have a treaty with Nigeria and everything which can be decided regarding the JDZ must be together. We cannot be alone in Sao Tome taking decisions, otherwise we will have a conflict with Nigeria," de Menezes said.
WEIGHTING OF THE STAKES
The joint development authority set up five years ago to manage the shared offshore area establishes a 60 percent stake for Nigeria and the remaining 40 percent for Sao Tome.
The sharing agreement followed the signing of a treaty ending a protracted maritime border dispute.
"I consider the treaty has been a very good thing," de Menezes said. But he said he believed the weighting of the stakes weakened Sao Tome's negotiating position.
"The power of the business, if you like, is on the side of the Nigerians," he added.
The offshore blocks awarded are in the deep waters of the Gulf of Guinea, one of the world's exploration hotspots since a series of huge oil discoveries over the last decade.
The second licensing round followed a first which was aborted after just one exploration contract was awarded for $123 million, to a consortium led by U.S. energy giant Chevron CVX.
Chevron is due to start drilling its first exploration well in its JDZ block in January and Sao Tome plans to launch a first oil exploration licensing round for its own economic exclusion zone (EEZ) waters by the end of next year.
((ENERGY-SAOTOME-INVESTIGATION; Editing by Pascal Fletcher and Brian Killen; dakar.newsroom@reuters.com +221 864 5076))
Fri Dec 9 18:36:42 2005 -GMT- pnac (nL09674271) = 1 18:36
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