Blocks 3 And 4 To Be Signed Tuesday, Lusa Says

Here's the latest, so I'll post it and run (note the error identifying us, not Anadarko, as the operator of Block 3 - they ought to get a nice kick out of that!):

13-03-2006 16:00:00. Fonte LUSA. Notícia SIR-7816110
Temas:

Sao Tome: Contracts for 2 blocks to be inked at Tuesday oil meet in Abuja

Sao Tome, March 13 (Lusa) - A ministerial delegation from Sao Tome and Principe departed Monday for Nigeria to sign production sharing contracts for two offshore oil blocks in the joint Gulf of Guinea exploration area operated with Abuja, the archipelago's oil minister said.

Speaking before flying to Abuja, Natural Resources Minister Deolindo da Costa said that among business on the agenda at Tuesday's meeting of the Joint Ministerial Council (JMC) in Abuja was the signing of production sharing contracts (PSCs) for Blocks 4 and 3 in the two countries` Joint Development Zone (JDZ).

If the Abuja meeting is fruitful, Blocks 3 and 4, with signature bonuses of USD 40 million and USD 90 million respectively, will become the first of five JDZ blocs awarded last May to be formally wrapped up.

The two blocks are operated by ERHC, a Nigerian-controlled, US-listed company, and Addax of Switzerland.

ERHC won preferential interests in all five JDZ blocks awarded last year.

An earlier attempt to sign PSCs for Block 4 last month was thwarted when Sao Tome's delegation left Abuja without signing the documents.

Nigeria's oil minister charged Sao Tome with bad faith and called for a public apology for the scuppering of the deal.

The archipelago denied responsibility for the flop, blaming Abuja for trying to force it to ink contracts that had been altered to give a small Nigerian firm 9% of ERHC's stake in the block.

RCN/CJB.

Lusa

UpstreamOnline's Barry Morgan didn't have the benefit of a conversation with Sao Tome's oil minister as Lusa did, so the headline on his 5pm EST Monday headline will spook investors who are already quite easy to spook, many having been victims of so many delays in the past. But it's not bad news. Blocks 3 and 4 will be signed, the Sao Tome oil minister said this afternoon as he boarded a plane for Abuja.

JDZ awards delayed

By Barry Morgan

Suitors hoping for decisions this week as promised on final awards for deepwater blocks in the Gulf of Guinea's joint development zone (JDZ) managed by Nigeria and Sao Tome and Principe may have to wait a little longer.

Nigerian minister of state for petroleum resources had indicated that he hoped production sharing contracts for blocks two through six might be signed on 14 March, but so far only one looks set to go.

Anadarko-operated block 3 has been finalised for tomorrow's signature, according to sources in Abuja.

Houston-based ERHC Energy enjoys a junior preferential stake in this block with Norwegian-Nigerian indie Energy Equity Resources. Equity also has a small stake in block 1 with fellow Nigerian indie Afren.

Also tipped to go tomorrow is JDZ block 4, which has been assigned to Addax and ERHC. Negotiations over block 4 stalled once more following continuing discord over Nigerian indie Conoil's persistent unwillingness to ink a deal that fails to address its equity demands in the block.

It is unlikely that Conoil's refusal to sign would forge a re-bid since the JDZ second licencing round is about to expire.

13 March 2006 20:47 GMT | last updated: 13 March 2006 20:47 GMT

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