ERHC Energy shares (OTC BB symbol: ERHE) fell $0.01 to $0.30 in morning trading, which has not yet topped 500,000 shares. The market's tepid response to the news has generated the purchase and sale of few large blocks, with the largest buy so far just 70,000 shares and the largest sale 50,000 shares. Sales lead purchases 359,840 to 130,600, however, as of 11:08am EST Wednesday.
The response came at a press conference rather than in a substantial written statement that would set forth the nation's plans in detail. It left unmentioned earlier statements by the President to the effect that the awards cannot be altered now, suggesting that position has not changed. It does not appear that blcoks will be rebid, as was the case after the Sao Tomean president rejected awards in the First Licensing Round, in which only Block 1 was awarded. Five blocks were awarded, including operatorship of two and equity in three others tor ERHC Energy, in the Second Licensing Round that ended on May 31, 2005.
Instead, the Sao Tome President attacked the probe report as "incomplete" in failing to mention that it was members of a rival party, o former Prime Minister Guilherme Posser da Costa and ex-President Miguel Trovoada, who signed the original agreement with ERHC's predecessor company, Environmental Remediation Holding Company of Denver and Houston, and and for not gettinjg input from the Nigerian side.
The fact that Sao Tome will lose much more than $58 million if the Second Licensing Round does not go ahead has not been lost on the islanders. Even petroleum affairs commission chief Carlos Neves has characterized the issue as an "internal matter" that should not impede the signings of Production Sharing Ciontracts. The statement by de Menezes on Tuesday did not seem to change that position in any respect.
Even more persuasive of the probability that the awards will go forward is a statement in the probe report that it did not find any evidence of favoritism or political corruption in the awards process. In addition, OPEC President Dr. Edmund Daukoru, Nigeria's oil minister, has said that the controversy on the Sao Tome side will not stop the signing of the awards accords.
Here is the report fropm Portuguese news agency Lusa, which has struggled to keep this story alive, probably in support of its own national oil company, Petrogal, which is seeking a role in the JDZ and the adjacent Sao Tome Exclusive Economic Zone.
Sao Tome: Offshore oil awards harmed islands' interests, says president
Sao Tome, Jan. 11 (Lusa) - President Fradique de Menezes says that offshore oil blocks awards to the ERHC oil company last year have damaged the interests of Sao Tome and Principe and an official investigation into the matter was "incomplete".
Speaking Tuesday to reporters in his presidential palace, de Menezes said that Sao Tome stands to lose USD 58 million if the second licensing round in the Joint Development Zone (JDZ) shared with Nigeria goes ahead.
Under the terms of awards for the five JDZ block announced in May 2005, ERHC, a US-registered but Nigerian-controlled oil firm, was given control of two blocks, in partnership with other companies, and gained significant interest in the remaining three blocks.
State prosecutors in Sao Tome launched an investigation last September and issued a report in December fingering ERHC as possibly having made irregular payments or given benefits to Sao Tomean officials ahead of the JDZ awards.
The awards were "seriously flawed" and harmed the interests of the Gulf of Guinea archipelago, said the official probe.
Production sharing contracts for the five blocks were due to have been signed at the end of 2005, but have been delayed due to the unfolding allegations of wrongdoing by as yet unidentified officials.
Signature bonuses for the five JDZ blocks would amount to USD 400 million, to be split 60:40 in Nigeria`s favor.
President de Menezes said it was still not known who had signed the original preferential agreement with ERHC in 2001, in reference to former Prime Minister Guilherme Posser da Costa and ex-President Miguel Trovoada.
He criticized the report by Sao Tome's Attorney General's office as being "incomplete", as there had been no questioning of Nigerian officials.
An initial accord signed with ERHC in 1997 that was re-signed in 2001 "is the biggest assault on the possessions of the Sao Tomean people since their independence", added de Menezes.
Sao Tome's president also criticized claims by the Attorney General's office that it had not been possible "to find documentary evidence to ascertain whether the allocation of shares and the second licensing round was marred by conflicts of interest and political favoritism".
The official oil awards probe was undertaken at the request of the islands' parliament and assisted by a consultant from Tulsa University in the United States.
An earlier licensing round in the JDZ awarded one offshore block to ChevronTexaco in partnership with ExxonMobil.
RCN/CJB.
No comments:
Post a Comment