Sinopec To Halt Oil Exports

Sinopec, ERHC Energy's partner in the Nigeria-Sao Tome Joint Development Zone Blocks 2 and 3, has decided it will not export oil outside of China begginning in the third quarter, it announced yesterday. It is China's third-largest oil company, and the sixth-largest in the world.

The China Daily News said today that the decision was made this week as the world's most populous nation faced multiple challenges from a 7.9 earthquake on May 12 that may have killed 88,000 people, leaving 5 million people homeless.

"China's largest oil company, PetroChina, also said it would increase its refined oil production to ensure supply for reconstruction and the summer harvest," the newspaper reported. Petrochina is providing 20 percent of its refinery output to the hardest-hit cities in the quake-ravaged region.

Sinopec has made quake relief its first priority, the article said. Investors are left with some uncertainty how seriously - if at all - the decision will impact the exploration of Blocks 2 and 3.

Here is the article:

Sinopec to halt oil products exports, raise output
(China Daily)
Updated: 2008-05-30 08:43


China's largest refiner Sinopec said it would increase its oil processing and halt oil products exports in the third quarter to ensure domestic supply.

"Sinopec will raise production, halt exports and adjust product structure to ensure domestic supply, especially for the reconstruction after the earthquake, the summer harvest and the Olympic Games," said Sinopec President Wang Tianpu.

Disaster relief is a top priority for Sinopec, according to the company. It will work in tandem with the government to keep the prices of oil products in quake-hit regions stable.

The company had made emergency deliveries of gasoline and diesel to earthquake-hit regions. It also ordered several of its refineries to raise output in response to the disaster.

China's largest oil company PetroChina also said it would increase its refined oil production to ensure supply for reconstruction and the summer harvest.

PetroChina has allocated 100,000 tons of refined oil in emergency supplies to Sichuan after the earthquake. By May 27, oil storage in Sichuan reached 252,000 tons, ensuring 16 days of supplies, the company said in a statement.

PetroChina will increase its oil supply to Sichuan, Chongqing, Shaanxi and Inner Mongolia by 20 percent for the summer harvest, the statement said.

Facing high crude prices in the international market, the government's control on domestic refined oil prices has caused big losses for the country's oil refiners. In the first quarter, Sinopec saw its net profit plunge 65.78 percent to 6.7 billion yuan.

This, happened even after the company got 12.3 billion yuan in government subsidies in March, of which 7.4 billion yuan was counted as first-quarter income.

PetroChina said its first-quarter profit fell 31.5 percent as refining losses and windfall taxes cut its earnings from record crude prices. Net income dropped to 28.9 billion yuan from 42.1 billion yuan a year earlier.

China exported 4.84 million tons of refined oil products in the first four months of this year, a decrease of 7.8 percent from a year earlier. In April, exports of refined oil products stood at 1.23 million tons, according to Customs figures.

From January to April, the country imported 12.68 million tons of refined oil products, up 9.2 percent, show Customs figures.

An Enterprising Move On The Corporate Development End

ERHC Energy has acquired a well-qualified VP for Corporate Development who will search for new ways to extend the company's holding, assets base and profits in coming years. It's a positive step in the current trading environment, but ERHE shares responded anemically after the appointment was made on April 30.

Here is the press release:

ERHC Energy Inc. Appoints Vice President Corporate Development

Apr 30, 2008 16:00:40 (ET)


HOUSTON, TX, Apr 30, 2008 (MARKET WIRE via COMTEX) -- ERHC Energy Inc. (ERHE, Trade ), a Houston-based company with valuable oil and gas assets in the Gulf of Guinea, today announced appointment of David Bovell to the position of Vice President Corporate Development. Mr. Bovell begins his duties with ERHC Energy immediately.

Mr. Bovell brings more than 25 years experience in corporate finance to ERHC Energy. He most recently served as managing director of Green Corporate Finance Ltd. and as director of Equity Partners for Emerging Markets. He was previously Finance Director for Antonov plc, where he initiated the company's listing on the Alternative Investments Market (AIM) of the London Stock Exchange.

In the newly created position of Vice President Corporate Development, Mr. Bovell will oversee planning and implementation of strategies for corporate growth. Responsibilities will include the identification of appropriate opportunities for corporate mergers and acquisitions by ERHC. Mr. Bovell will also pursue future corporate finance options, including stock-exchange listings.

"We are pleased to have David join us and anticipate he will be pivotal in designing and implementing a focused growth strategy for ERHC Energy," said Peter Ntephe, acting Chief Executive Officer for ERHC. "We sought a person who could accelerate our examination of various strategic opportunities to enhance shareholder value, including expanding the Company's assets through acquisitions and exploring various stock exchange listing alternatives."

Mr. Bovell's expertise is corporate finance for small and medium cap companies, with an emphasis in strategy formulation, business planning, fund raising, stock exchange listings initial public offerings and mergers and acquisitions.