Up[streamOnline reports are hobbled by a Tuesday deadline for the Thursday hard copy edition, while developments go unreported online for days at a time.
Here is the article:
Sao Tome scrutinises ERHC
By Upstream staff
Sao Tome's Attorney General's office has requested that the US government investigate contracts awarded to Houston-based ERHC Energy during a recent exploration licensing round.
US-listed ERHC, which Sao Tome says is controlled by Nigerian company Chrome, was the biggest winner from the licensing round for five blocks, gaining the joint control of two blocks and stakes in the three others.
According to the report obtained by Reuters, Sao Tome's investigation into the contracts concluded that alleged irregularities could result in a loss of $58.6 million in revenues if preferential rights are granted to ERHC.
"Apart from fraud, Sao Tome and Principe should again reexamine whether there are grounds for terminating the contract," the report said.
Expressing concerns over the financial and technical qualifications of some of the companies awarded blocks by the Joint Development Authority (JDA), the inquiry suggested some of ERHC's partners might simply withdraw.
The report said US independents Devon Energy and Noble Energy had already withdrawn from two groups where ERHC was a partner.
"One immediate challenge to the JDA may be the partial collapse of the second round itself," the report said, noting none of the groups awarded blocks had finalised production sharing agreements with the JDA.
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