Correction A retired American oilfield geologist who owns 490,000 shares of ERHC says I misunderstood him when he said the entire Nigeria-Sao Tome and Principe Joint Development Zone contains only a billion barrels, he said in an IM chat Saturday morning. Here is his note asking for this correction:
Joe, would you please be so kind as to issue a correction, what i meant in our IM was that there would be no more than 1 bil. in a given field in my estimation but that there would be many 300milbarrel to 1 bil bar fields spread discontinuously across the very large JDZ province liklely to add up to 10 bil+ barrels recoverable, like pearls strung together, many intermediate size fields, sorry if i was not clearer at that time, but it would help if you added this clarification there is alot of oil there in my estimation, again sorry for the miscommunication regards
Here is Doc's latest note, with some important observations on Meridian, the Block 1 find, ERHC Energy's likely share price and more:
Regarding the GoG, some headway has been made but the situation is still very fluid. Some of the players are still bickering - there is no love lost between some of them, and if trillions of Nairas were not a stake they would not be talking at all. And deals are still being negotiated, both inside and outside of Nigeria.
Dr. Daukoru, who is now a worldwide celebrity, has already been embarrassed once and it is true that he wants visible progress to be made, but things always take time here. Anyone affirming that all PSCs will be signed by March 14 - or even just one PSC - is manipulating the situation for their own ego, for their financial benefit, or for both. There is a big difference between a possibility - which certainly exists - and a certainty. Not all songs have been sung. Either way, based on what I know it is difficult to reasonably expect any major uptrend in ERHC's stock price once blocks are signed.
The alert observer - or the smart investor - will also have noticed that poster "Meridian" on the heavily-censored "pumping-allowed-only" InvestorsHub board started propping up ERHC on your side of the pond precisely when the company needed support with negotiations on our side. One will not be surprised to see that this poster tells that board's eternal wishful thinkers very much what they want to hear (if only they knew!) and completely ignores any question that could infer scenarios that are less than "rosy".
This recent Energy Intelligence's piece surprised many here in the sense that it was found less balanced than usual. STP may not have local "indies" controlled by various influential men who all want a piece of the pie (and why not?), but one only needs to look for example at the doings of the Trovoada clan over the past decade to notice the very same type of behavior. What you might call "favors" is the way business is conducted in Africa - one of the reasons why it is easier for us to find
common ground with the Chinese, who have a similar business philosophy.
The reference to block 4 in my last note was not a typo, nor was it presumably in Mr. Barry Morgan's earlier article. The latest word here is that thru their test well (or wells, there may well be more than one, but this hasn't been confirmed to me, yet) CVX has probably discovered an extremely large field at the edge of block 1 that straddles into neighboring blocks - a structure so large that the words "elephant field" may need to be stepped up to "mammoth field," because, as one of my people said, even our large-size African elephant would now look like a small goat.
If true, Big American Oil will amost certainly want more of it than just Block 1. One solution is to have STP stall some more for them, but the more they wait the more dramatically the stakes and the price will go up in the whole zone. The other solution is to get whatever they can at this late stage.
With this in mind the slight 9% re-allocation in Block 4, possibly to Godsonic, which would then merge with (be bought by) Conoil, whose rights would then be bought out by CVX or XOM, may have come into play as a bargaining chip. Note that CVX and XOM together made a profit of around 50 billion dollars last year but they badly need to have additional oil reserve replacements
under their control.
"This way America gets something substantial out of block 4 and they agree not to get in the way of letting Sinopec operate block 2" is what I heard. They may well also get carte blanche for the lions' share of the Sao Tome EEZ later this year as a part of the deal.
Mr. Shea, please keep in mind that it is only "one" possible scenario in a very tangled web of power and control with half a trillion dollars at stake, and possibly much more.
It is also possible that things will be disentangled more quickly thru the direct involvement of President Obasanjo and his STP counterpart, but one needs to remember that there are many more urgent dossiers at this time in both Nigeria and Sao Tome and Principe.
Doc
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