Block 4 On JMC Agenda, Platts Says; Most PSCs Near Ready; Decision On Addax Near

Confirming our earlier story that a one-week postponement of the Nigeria-Sao Tome and Principe Joint Ministerial Council meeting has been requested by the Sao Tome side, Jacinta Moran of Platts spoke with the executive director of Sao Tome's National Petroleum Agency, who told her the delay was due to "not only the signatures of the blocks and the issue of block 4 but there issues concerning the management of the Joint Development Authority and budgetary issues."

The inclusion of Block 4 in the negotiations is promising, although the NPA official did not indicate his country's final position on the matter of approving the substitution of Addax Petroleum for Noble Energy in that block. "The decision has almost been taken but at the this upcoming meeting, one of the subjects on the agenda is the operatorship of block 4," the official said.

Here is the Platts story, the second in two days:

The Sao Tome government has asked for a one-week postponement of the meeting on production sharing contracts scheduled for this weekend of the Nigeria-Sao Tome and Principe Joint Ministerial Council, Sao Tome's National Petroleum Agency executive director Luis Prazeras said Wednesday.

Prazeras denied that the request was connected to the resignation of Sao Tome's Foreign Minister Ovidio Pequeno, who stepped down Monday after Sao Tome President Fradique de Menezes refused to fire him in the face of criticism from the center-left MLSTP party that he had improperly used Moroccan aid money.

"We need one more week because in this JMC meeting, it is not only the signatures of the blocks and the issue of block 4 but there issues concerning the management of the Joint Development Authority and budgetary issues so the government requested one more week," Prazeres told Platts.

He said negotiations on blocks 2 and 3 had been completed but that there were still some "adjustments" on block 5 and 6 while operatorship of block 4 would be a "subject on the agenda" at the JMC meeting.

"The decision has almost been taken but at the this upcoming meeting, one of the subjects on the agenda is the operatorship of block 4," said Prazeres.

Swiss-based Addax last October picked up Noble Energy's 35% operating stake in block 4 after the US independent quit the block.

ERHC Energy, which enjoys a substantial element of preferential rights without the obligation to pay any part of the signature bonus in block 4, at the time said it had a memorandum of understanding that Addax would agree to pay a $90-mil signature bonus and commit, like Noble had, to a three-well program in the first four-year exploration period.

A consortium of Nigeria's ERHC Energy and Devon Energy won a 65% stake and the operatorship of block 2. Devon later withdrew from negotiations, saying the level of interest did not warrant its bid. Anadarko won a 51% share and the operatorship of block 3. A consortium of International Commerce and Communications and Oil Exploration Consortium got 75% and operatorship of block 5. An 85% stake and operatorship of block 6 went to Nigeria's Filtim Huzod.

"The minister of Natural Resources has requested a postponement of one week. We are now waiting to hear from the Nigerian side, after that, a date will be set," Prazeres said, adding that he was confident that the second round licensing awards would be signed, finally.

--Jacinta Moran, jacinta_moran@platts.com