'Awards Harmonized,' JMC Says, And Go To Heads Of State

The 2004 licensing round may yet come to an uplifting end if heads of state President Fradique de Menezes of Sao Tome and President Olusegun Obasanjo of Nigeria can sign the agreed-on awards documents and announce the results, Reuters reported this evening as a three-day meeting of the Nigeria-DRSTP Joint Ministerial Council ended without an announcement by either side.

The language Reuters used in a story long on history but short on quotes suggests that the required consensus - agreement by everyone - was obtained among the delegates from both states, but De Menezes has the tougher job of selling the agreement to his countrymen, who have proved both fractious and resistant in the past.

In Sao Tome, the awards have to meet a consensus of the National Petroleum Council and the National Petroleum Agency, and may be reviewed by Parliament, where the opposition Movement for the Liberation of Sao Tome and Principe (MLSTP) is in control. It was the MLSTP that forced the awards to be reviewed again by the Nigeria-DRSTP Joint Ministerial Council, so there could be a well-founded presumption that the party will accept the new awards document.

It is less likely to run into trouble with either the NPC or NPA, two institutions created by the country's new "transparency" law that has led to a bevy of resignations and the firing of former special presidential advisor on petroleum Patrice Trovoada, who is a likely candidate against President de Menezes in the 2006 presidential elections.

But it is unclear how long the process might take a second time, and indeed, whether the awards process will survive the "transparency" requirements. At best, the process could be complete by the end of the three-day weekend, or at worst, be dragged out for several more weeks. Most observers would probably say rapid approval is the more logical outcome.

In Nigeria, the process is simple; upon his return from Paris, President Olusegun Obasanjo can either sign the awards document or not, and that is the end of the matter.

The lead paragraph of the Reuters story gives a much different impression of the actual outcome of the JMC meeting, since it says the parties failed to award the blocks. However, the statement issued by the governments said they had reached agreement on "all the blocks." Th delegations are not empowered to award the blocks without approval from the two heads of state.

The entire story was posted in the Raging Bull ERHE message board.

Here is are a few paragraphs of the story, which is by Felix Onuah and from Abuja:

REUTERS
Sao Tome/Nigeria fail to award oil blocks again
by Felix Onuah

ABUJA, May 26 (Reuters) - Sao Tome and Nigeria failed again on Thursday to award oil exploration licences after a two-day meeting that sought to end five months of delays plagued by discord and corruption allegations.

A communique issued after the ministerial meeting in the Nigerian capital said the two parties had come to a "harmonised position on all the blocks," but added that this was "subject to the endorsement of the heads of state."

At the previous ministerial meeting in April, the two sides also said they had forwarded recommendations to the heads of state for endorsement.

The offshore blocks are in deep water in the Gulf of Guinea, one of the world's exploration hotspots since a series of huge oil discoveries over the last decade.

In another report that suggests pretty much the same thing and mentions ERHC Energy in a negative light, afrol news reports agreement on the shape of the latest awards, too, citing Sao Tome oil minister Arlindo de Carvalho as a source:

New oil block awards after São Tomé corruption scandal
By staff writers

ABUJA 25 May 2005 (afrol News) -- Licensing of oil blocks in the Nigeria, São Tomé and Príncipe Joint Development Zone (JDZ) is set to resume after a delay of five months. The delay came after a scandal involving corruption charges and the temporary resignation of São Tomé's Natural Resources Minister Arlindo Carvalho, which only ended after the personal intervention by Nigeria's President Olusegun Obasanjo.

Government officials in São Tomé and Príncipe today told the press in Nigeria that there was reached an agreement on going on with the JDZ licensing process of five oil and gas blocks in their jointly administered waters. Final decisions on the new awards could now be announced within a short time, the official indicated after having met his Nigerian counterparts.

The licences of the five blocks were originally to be awarded in January this year, but the JDZ's administration agency could not come up with a decision at that stage. This rapidly caused speculations on a possible power struggle between the different interests represented in the agency and its overall integrity.

In particular the relatively small and unknown US-based Environmental Remedial Holding Corporation (ERHC) has been at the focus of possible corrupt practices at the Joint Development Authority (JDA). ERHC had obtained preferential rights on the most promising blocks during the first licensing round, which it now was to make use of.

According to investigations by Nigeria's independent press, a company belonging to Nigerian businessman Emeka Offor holds around 50 percent of the shares in ERHC. Mr Offor is reported to have had close links with Nigeria's former military dictator Sani Abacha and ERHC has never documented any oil exploration or drilling experiences from other parts of the world.

While the "oil company" originally was brought aboard by the São Toméan government in a 1997 contract, current President Fradique de Menezes is reported to be eager to exclude ERHC from further oil deals in the JDZ. President Menezes is further accused by the São Toméan opposition of abusing his double role in the national Petroleum Council and receiving cash from other Nigerian-controlled bidders.

The apparent power struggle in the JDA had paralysed its awards of five new blocks for five months, causing São Tomé's Nigerian partners to lose patience. President Menezes fired his adviser on petroleum issues, Patrice Trovoada, accusing him of furthering his private business interests and delaying the award process. Another adviser, Manuel Rita, was also sacked after it was known he owned shares in ERHC.

São Tomé's Minister of Natural Resources, Arlindo Carvalho, last week found it was impossible to continue working in the current environment of suspicions and allegations and resigned from his post. The resignation was however not accepted by President Menezes, who reiterated his confidence in Minister Carvalho.

Given the chaotic situation in São Tomé and Príncipe, Nigerian President Obasanjo on Friday went on a quick visit to the nearby archipelago. During a three-hour stay, the Nigerian President met with President Menezes, Prime Minister Damião Vaz d'Almeida, a parliamentary commission on petroleum issues and representatives of the JDA.

President Obasanjo, who was visibly irritated over the necessity to go to São Tomé, had advised his colleagues against "politicking with purely technical matters." Other Nigerian politicians feared the JDA would lose its good reputation and indicated that economic stakeholders in São Tomé were jealous of the large Nigerian business involvement on the new blocks.

The Nigerian intervention nevertheless led to the rapid regrouping of the JDA, and reinstated São Toméan Minister Carvalho has already announced that the licences most probably will be awarded in a JDA meeting very soon. Nigeria gets 60 percent of the oil revenues from the JDZ, while São Tomé gets 40 percent of revenues.

Trading Updates: Another Day Of JMC Talks Is Underway As Price Unravels; Monday Declared A Holiday In Nigeria, Making Double Probability 3-Day Weekend

Yet another day of talks between delegations from Sao Tome and Principe and Nigeria to their Joint Ministerial Council is underway, and traders so far have not moved the $0.702 x $0.702 Bid and Ask.

An update from regular poster ArtK4K, a Miami psycholgist, says he called the Nigeria-Sao Tome Joint Development Authority's offics in Abuja and was told that the meeting got started at 1pm Abuja time, which is 8am EDT in New York.

Another poster was told the JDA would issue a press release today.

Update, 4:15pm EDT, 5/26/05: We were wrong about the last-minute buying; rather oddly, between 3:50 and 4:00 there were 12 trades, with 22,000 Buys and 43,000 Sells, but the Sells did not take the Bid or the Ask down, and the final purchase of 2,500 shares that followed a 40,000 burst of six Sells bumped the price to $0.665. The Buys vs. Sells for the day tell a different story. While they often seemed in the early afternoon as though they might tie, by late in the day selling overtook the issue and ended up ahead by 234,000 shares. For the day, there were 729,680 Buys and 963,627 Sells, with 53,500 unidentified shares in 337 trades.

Update, 4:08pm EDT, 5/26/05: I expect a strong opening tomorrow, and I'm delighted that despite the intense uncertainty and indeed, anxiety, this awards process has generated for so many people, we lost only $0.037 cents. That translated to $4,552.48 for the ERHC On The Move portfolio of 123,040 shares purchased at an average of $0.4394. It just goes to show you that we have nothing to fear from the truth.

Update, 4pm EDT, 5/26/05: We close at $0.665. Looking at ADVFN on its 15-minute delay, I see a splurge of buying of some 80,500 shares in 14 trades without a single sell, but that the Buy-Sell margin is greater than ever for the day, at around 212,000 shares favoring the Sell side. I need to see the last 15 minutes to get the whole picture, though, because there was a lot of buying at the end.

Update, 3:59pm EDT, 5/26/05: Volume jumps to 1,739,800 and the price goes to $0.665, with Bid and Ask unmoved.

Update, 3:57pm EDT, 5/26/05: The volume leaps 10K to 1,719,300 and it looks like we may close at $0.665.

Update, 3:54pm EDT, 5/26/05: Now the price and the Bid is $0.66, and the volume 1,709,300.

Update, 3:53pm EDT, 5/26/05: We're at $0.6510 now but the Bid has gone to $0.655 and the Ask to $0.665 on 1,709,300 shares of volume.

Update, 3:48pm EDT, 5/26/05: Just 11 minutes to go and the price is $0.645, despite rallies in oil prices and on both the4 Nadaq (+20) and the DJIA (+80). The Bid is better at $0.65 and the Ask has improved to $0.655. It may yet move up a few cents.

Update, 3:46pm EDT, 5/26/05: Last-minute posts are frequently a pumper's scam to get out higher after day-trading at a bad price. This one from our Comments section sounds like one, but you make up your own minds:

This meeting is it and it will be finalised this evening. They started late today and there are many items on the agenda, as you smart and on the ball investors should be aware of. Please do not call Senor Augusto at the UN Mission any more. He has the same information that many of you have and nothing more. The official news will come from the JDA. You've waited this long you can wait another day or two. If not, please sell your shares for whatever company you are invested in now.

Obrigado

Update, 3:40pm EDT, 5/26/05: We're climbing a bit, to $0.655, the Ask, and so is the Bid, to $0.646, but slips back a tenth-cent to $0.646. Volume is closing in on 1,.7 million, now at 1,682,100 shares.

Update, 3:34pm EDT, 5/26/05: Someone on RB tipped LLLI this morning, and that's up $0.75 to $4.01 now. ERHE, meanshile, is at $0.65 on 1,672,100 shares.

Update, 3:30pm EDT, 5/26/05: The Bid is up to $0.645, and the Ask stays at $0.65 as volume climbs to 1,637,100 shares. It doesn't make sense to me that they would announce awards late at night, but it would not be terribly unusual, either. I just don't think so.

Update, 3:27pm EDT, 5/26/05: The price rises a cent to $0.65, while the Bid lingers at $0.64 and volume hits 1,624,600 shares. By the way, the 3:16pm tip and the 3:25pm tip are from different people.

Update, 3:25pm EDT, 5/26/05: A last-minute Update from Markvol10:

****JMC MEETING UPDATE***Just called Sam's cell phone. A lady answered. I asked to speak with Sam and she told me that he had just been called into the JMC meeting. It's 8:00 pm there right now and she said they will be meeting until 9;30-10pm. I asked her if meeting was going well and she said that everything seemed very positive. She told me to call Sam in 2 hours. The wait continues although it seems like real progress is being made and things are moving towards a conclusion.

Update, 3:20pm EDT, 5/26/05: Welcome, first-time poster!

Update, 3:16pm EDT, 5/26/05: A nice Surge develops with volume going to 1,601,600 as a trusted poster informs me that his most reliable source in Nigeria assures him that at whatever time, there will be an awards announcement from the Joint Development Authority - so you heard it here third-hand, presuming his source also heard it. The price is $0.64, the Bid, and the Ask is $0.645.

Update, 3:07pm EDT, 5/26/05: A 37K jump in volume brings the price from $0.64 to $0.642, and volume to 1,548,000 shares. Eight minutes to the 3:15 Surge.

Update, 2:59pm EDT, 5/26/05: Sellers are now increasing their lead over buyers, with some 811,000 Sells topping 600,00 Buys and 53,500 shares unidentified in 289 trades recorded by ADVFN at 2:43. The price is $0.642 and current volume is 1,513,000 shares.

Update, 2:56pm EDT, 5/26/05: The price is $0.645, and the Bid has improved to $0.64 as we stand 20 minutes from the 3:15 Surge. The volume is 1,507.500 shares. There may not be a lot of late buying today unless news breaks soon.

Update, 2:53pm EDT, 5/26/05: We just hit 1,500,000 shares, with the Bid lower at $0.635 and the Ask at $0.645. Looks like there will be no news forthcoming today, and perhaps another day of meetings tomorrow.

Update, 2:44pm EDT, 5/26/05: Investor's Hub, which had captured some of the better posters from Raging Bull, seems to have lost them now. The Raging Bull madness goes on and on. Let's just hope that no newbie stops there first.

Update, 2:38pm EDT, 5/26/05: The price is $0.64 once more, the Bid, and the Ask is lower at $0.645 as volume reaches 1,460,500 shares on slow trading.

Update, 2:31pm EDT, 5/26/05: The price has improved to $0.652, the Ask, while the Bid is $0.645. Volume has reached 1,321,400.

Update, 1:58pm EDT, 5/26/05: The coming three-day weekends in Abuja and the United States gives me great confidence that an announcement of awards will come late Friday or on Saturday, and if not then, at a ceremonial event on Monday. The Bid and Ask are $0.65 x $0.655, and volume is 1,410,100 shares.

Update, 1:52pm EDT, 5/26/05: The price is $0.65, and volume is 1,401,100. The Bid has risen to $0.65.

Update, 1:40pm EDT, 5/26/05: The price slips to $0.645, while the Bid rises to $0.645 and the Ask slips to $0.655 on volume of 1,389,600 shares.

Update, 1:35pm EDT, 5/26/05: The price slips to $0.65, while the Bid stays at $0.64 and the Ask slips to $0.655 on volume of 1,388,600 shares.

Update, 1:33pm EDT, 5/26/05: The price has risen two cents to $0.66 on volume of 1,387,800 shares, and falls back to $0.655. The Ask stays at $0.66.

Update, 1:25pm EDT, 5/26/05: The price is $0.64, the Bid, and there is now a two-cent gap with the Ask at $0.66. Volume is approaching 1.4 million, now at 1,384,600 shares.

Update, 1:23pm EDT, 5/26/05: Nigeria's president has declared a public holiday for Monday, May 30, creating the rare combination of a three-day weekend both there and in the United States. Virtually every large one-day gain in ERHE share price has come on a three-day weekend. This would seem to virtually ensure that the awards will be announced on Monday, which Nigeria has dubbed "Democracy Day:

FG declares Monday Public Holiday
2005-05-25 09:09:55

The Federal Government has declared Monday, May 30, 2005, a Public Holiday to commemorate democracy day.

This was announced by the Internal Affairs Minister, Iyorchia Ayu.

Update, 1:06pm EDT, 5/26/05: The Bid falls back to $0.64, while the Ask stays at $0.66. We're off $0.052, or 7.41 percent now, on improving volume of 1,381,100 shares.

Update, 1:02pm EDT, 5/26/05: The Bid improves to $0.65 as the lunch hour ends. We await the 3:15 Surge. Volume is unchanged.

Update, 12:58pm EDT, 5/26/05: The price has improved to $0.65 and the Ask is better at $0.66, but the Bid stays at $0.64. The volume stands at 1,376,100 shares.

Update, 12:53pm EDT, 5/26/05: Some pumper who can't spell Botswana has a rosy message for us in the Comments section. The errors and ampersand spell SwingingK:

Joe,

I think you will be very happy with what was accomplished in the meetings. It will open a new era in Prosperity for the Sao Tomeans, & give the world a much needed Natural Resource.

Batswanna

Update, 12:45pm EDT, 5/26/05: Now we're at the Bid, $0.64, and the Ask is lower at $0.65. Volume has reached 1,365,800 shares, and Abuja's silence continues. When we get our money, they'll get theirs.

Update, 12:40pm EDT, 5/26/05: The Bid has fallen to $0.64 after no news emerged from Abuja. The Ask is at $0.655, and the current price is $0.65. Volume has reached 1,354,800 shares.

Update, 12:33pm EDT, 5/26/05: Now they knows how we feel. Nigeria is getting the hold-up act from Switzerland, where the Supreme Court recently ruled the Swiss government should immediately return $458 million in funds looted by late dictator Gen. Sani Abacha. Nigeria, meanwhile, is holding up payment of the Block 1 share owed to Sao Tome, some $49 million - less its loan of $44 million. Here's a couple of grafs from the Vanguard story:

Swiss govt aborts deal on $458m Abacha loot
Posted to the Web: Thursday, May 26, 2005

PARIS -— Switzerland has halted a deal to hand back $458 million stolen by the late General Sani Abacha and hidden in Swiss banks while it seeks to expel Nigerian illegal immigrants, an outraged President Olusegun Obasanjo said yesterday.

President Obasanjo, who is on a visit to Paris, accused Switzerland of acting illegally in side-stepping a ruling from its own Supreme Court, which in February ordered that the funds be returned and demanded that the money be immediately returned.

“I must express deepest disappointment and dismay with the Swiss authorities who continue to hold onto Nigeria’s legitimate funds, covertly looted and kept in their banks,” he told an audience of dignitaries at the UNESCO headquarters in Paris, according to his spokeswoman, Mrs Remi Oyo.

Update, 12:27pm EDT, 5/26/05: The price is $0.66, the Bid is $0.665, with the Ask at $0.665. Volume is now over 1,329,800.

Update, 12:20pm EDT, 5/26/05: Buys leads Sells 63,250 to 11,500 in the past 39 minutes, per ADVFN's 15-minute delay.

Update, 12:20pm EDT, 5/26/05: The Bid has dipped to $0.65, and the Ask to $0.665, likely on the lack of news at 5pm Abuja time. The price is $0.66, and volume stands at 1,281,400, moving pretty slowly.

Update, 12:17pm EDT, 5/26/05: The gap between Buys and Sells has steadily fallen, from 180K to 169K to 127K now, and the last 41 trades reported on ADVFN still show Buys leading Sells by 29 to 12. ADVFN has a 15-minute delay.

Update, 12:12pm EDT, 5/26/05: The price is $0.66, and volume is 1,276,400. In Iraq, Operation Thunder is about to get underway. It will encircle Baghdad and work inward to root out insurgents.

Update, 12:07pm EDT, 5/26/05: We're looking better now at $0.67, with the Bid at $0.66 and the volume uop 47K to 1,273,800. At 11:39 on ADVFN's 15-minute delay, the Buy-Sell gap had narrowed and the last seven trades were Buys. Oops - the price has slipped to $0.66. No news from Abuja.

Update, 11:50am EDT, 5/26/05: The volume has pretty much come to a halt as investors wait to see whether the JDA will issue a promised press release or the Joint Ministerial Council meeting will come to an end with - or without - awards being announced. Any announcement would likely have to wait until Friday or Monday, however, as Presdent Obansanjo is not in Nigeria today.

Update, 11:44am EDT, 5/26/05: GEECF has reversed course by 25 percent. It was at $0.62 earlier and is now at $0.40, down $0.15 from the open, on 178,000 shares of volume, and there is an $0.11 gap.

Update, 11:39am EDT, 5/26/05: The price is $0.655, the Ask, while the Bid lingers at $0.651. Volume has climbed to 1,206,300, with trading very quiet now. There were 223 trades at 11:17, and Buys lagged Sells by 160,000 shares, with 53,500 unidentified.

Update, 11:36am EDT, 5/26/05: The President is making an important policy statement on Israeli-Palestinian relations. We think a significant breakthrough is near. He says "Now we have reached a moment of hope."

Update, 11:32am EDT, 5/26/05: Checking in with the London desk, I note that that EEL has moved up after yesterday's decline. After a block of 1.2 million shares traded at 1.17 pounds yesterday, the price fell to $1.15, and is now back up to 1.20. Maybe Patrice Trovoada has made some headway. ERHE's price has improved to $0.665.

Update, 11:30am EDT, 5/26/05: The price is stuck at $0.655, and so is volume, and the Bid and Ask remain at $0.65 x $0.655.

Update, 11:24am EDT, 5/26/05: Volume has kicked over 1.2 million to 1,200,600. Price, Bid and Ask are unchanged. It's now 4:22 in Abuja, and the close of business draws near. Will the JDA issue a press release, as promised? Who knows?

Update, 11:21am EDT, 5/26/05: Buys lead Sells 29 to 12 in the last 41 trades at 11am EDT.

Update, 11:17am EDT, 5/26/05: The price is $0.65, the Bid, and the Ask is $0.655. Volume has reached 1,198,600 shares, a good showing on any day.

Update, 11:11am EDT, 5/26/05: One thing we can conclude from the talks going into a third day is that no one came to them ready to give up their position. That was reinforced by the Tanko and de Carvalho comments as well. But knowing what is at stake for both nations and the probable consequences of failure, it seems hard to believe that we would get another non-result this week.

Update, 11:09am EDT, 5/26/05: The price is $0.65, the Bid, with the Ask now $0.655. Volume is 1,185,600 shares. Good discussion our Comments section on the possibility of awarding undisputed blocks.

Update, 11:05am EDT, 5/26/05: With 211 trades as of 10:47, the last 41 were 3:1 Buys to Sells, according to ADVFN. Sells still dominate over the day, however.

Update, 11am EDT, 5/26/05: The price has slipped to $0.655, the Ask, with the Bid at $0.651 and volume up to 1,170,600 shares.

Update, 10:55am EDT, 5/26/05: The price is unchanged at $0.66, with volume now 1,165,600 shares.

Update, 10:50am EDT, 5/26/05: The JMC meeting is likely to take a break any minute now, after two hours of non-stop dialogue. All indicators but volume are unchanged. Volume is 1,156,600 shares.

Update, 10:48am EDT, 5/26/05: The price is $0.66 again, with the Bid and Ask unchanged at $0.655 x $0.66. Volume is 1,150,600.

Update, 10:46am EDT, 5/26/05: The price is $0.655, with all else unchanged. If news does come and it's positive, there could be an extremely sharp upturn today.

Update, 10:44am EDT, 5/26/05: The Bid has fallen to $0.655 and the Ask is lower at $0.66, the current price, as volume rises once more to 1,143,100 shares.

Update, 10:42am EDT, 5/26/05: The price is $0.66 as volume rises to 1,138,100 shares. The Bid and Ask are $0.66 x $0.665.

Update, 10:37am EDT, 5/26/05: By 10:22am EDT this morning, there were a whopping 182 trades, with 378,305 Buys and 572,320 Sells and 53,500 undidentified shares. These are ADVFN's numbers, delayed 15 minutes .<

Update, 10:35am EDT, 5/26/05: The price has come back to $0.665, the Ask, with the Bid at $0.66. Volume is a great 1,069,600 shares. Lots of folks picked up cheap shares on the way back up.

Update, 10:25am EDT, 5/26/05: Money.net has crashed again.

Update, 10:21am EDT, 5/26/05: You blink and it's gone. The price has surged back to $0.655, the Bid, and the Ask is now $0.66 as volume hits 992,426 shares.

Update, 10:17am EDT, 5/26/05: Volume is 961,725 with the price still at $0.645. the Ask, and the Bid a half-cent lower at $0.64. Feels like the market will rest for a breather here. I'll make coffee.

Update, 10:15am EDT, 5/26/05: Just 45 minutes into the day and we're closing in on a million shares traded, one of the heaviest days of volume in recent mwemory. The price is $0.645, the Ask, and the Bid is $0.64.

Update, 10:13am EDT, 5/26/05: We're back at $0.64 and the Ask is $0.645. Volume is 941,225.

Update, 10:11am EDT, 5/26/05: Now we're bouncing off the bottom, at $0.632, with the Bid $0.635 and the Ask $0.64. Volume slowing, finally, at 930,525.

Update, 10:11am EDT, 5/26/05: We're at $0.63 now, the Ask, with the Bid better at $0.625. Volume is 913,050 shares.

Update, 10:09am EDT, 5/26/05: Now the price is $0.625 and the Bid is $0.621, with volume at 810,982 and the Ask $0.625. Traders are headed for the exits. We're sticking around.

Update, 10:05am EDT, 5/26/05: Slipping to $0.63 now as volume hits 744,482, promising a 2 million-share day or better. Bid and Ask are $0.64 x $0.635. The pattern has always been to have a sharp selloff before the high of the year is reached.

Update, 10:03am EDT, 5/26/05: We hit $0.64, off $0.062, and the Bid and Ask are lower at $0.64 x $0.645. Looks like we're headed to a good solid loss. No word from the JDA, of course.

Update, 10am EDT, 5/26/05: The price is $0.65 again, as volume hits 628,832. Bid and Ask are $0.65 x $0.66. It looks like another run at the low of the day. By the first 69 trades at 9:42am, Buys lagged Sells by 1:2.

Update, 9:51am EDT, 5/26/05: Yesterday's volume at this time was 77,000. Now it's 591,332 and we're off $0.047 at $0.655, the Bid, with the Ask at $0.66. The Buy-Sell ratio at the opening was 1:1, but the unidentified shares traded were as high as both in the first 160,000 or so. There were lots of Buys.

Update, 9:51am EDT, 5/26/05: The sellers have made their statement. The price is $0.655, the new Bid, and the Ask stays at $0.66. Volume is 546,832.

Update, 9:48am EDT, 5/26/05: We're clawing back to $0.655. Volume is a very healthy 455,332 and the Ask has risen to $0.66.

Update, 9:46am EDT, 5/26/05: It looks for the moment as though $0.65, the day's low, will hold, as the Bid rises again to $0.651, the current price.

Update, 9:44am EDT, 5/26/05: Volume is now 300K in the first 15 minutes, or at least 297,832, and the Bid is $0.65, the price, and the Ask is $0.655.

Update, 9:42am EDT, 5/26/05: We're blowing through the stops now, at $0.65, with the Bid $0.651 and the Ask $0.655. Volume is 287,832, so this qualifies as a shake, if not a selloff.

Update, 9:39am EDT, 5/26/05: We're at $0.665 now, off $0.042, with the Bid and Ask both lower at $0.66 x $0.666. Volume is a brisk 253,142 shares.

Update, 9:38am EDT, 5/26/05: We are sharply off this morning and look headed for a good dive. With 181,422 shares traded in the first seven minutes, the price is $0.67, the Ask, and the Bid is $0.665.

Money.net was not working, so I apologize for the two earlier posts when I thought it was.

Update, 9:32am EDT, 5/26/05: Momentarily, at least, the Bid is higher than the Ask, at $0.702 x $0.70. There is no volume.

Update, 9:26am EDT, 5/26/05: No change in the Bid and Ask as the opening bell draws near. Yesterday's close was $0.702, and that is the opening Bid and Ask at this time - but likely to change in a few minutes.

Nigeria Warns Sao Tome On Oil Award Delays

A story in the daily Punch of Nigeria business section Thursday morning says Nigeria warned Sao Tome at the start of yesterday's meeting not to let extraneous facotors influence their country's decision to ratify the Nigeria-Sao Tome and Principe Joint Development Authority licensing awards.

Here is that story, which can be read in conjunction with an earlier post here citing the warning issued by Abubakar Tanko, a high-ranking Nigerian foreign ministry official and a member of the JDA's ruling Joint Ministerial Council:

THE PUNCH, Wednesday, May 25, 2005
Oil blocks: Nigeria alerts Sao Tome
by Michael Faloseyi

ABUJA -- The resumed meeting of the Joint Ministerial Council of the Nigeria-Sao Tome and Principe started on a cautious note on Tuesday, when Nigeria warned her partner not to bow to external influences in arriving at a decision.

The meeting was expected to determine winners of the five oil blocks put on offer during the 2004 bidding round but could not start until very late in the day, as representatives of each country met privately before the joint deliberations.

Earlier, there had been widespread media reports that both parties could not agree on the ratifications of the winners of the blocks as recommended by the technical committee of the Joint Development Authority.

The parties were said to have accused each other of exerting undue influence in the determination of the winners recommended by the technical committee.

The leader of Nigerian delegation on the JMC, the Minister of State for Foreign Affairs, Alhaji Abubakar Tanko, while declaring the meeting open, acknowledged that the meeting had been unusually delayed.

According to him, “We met here on April 26 and 27, 2005 and took some far reaching decisions which are expected to chart the way forward for the activities of the JDA to proceed for endorsement of the winners in the bids without encumbrances.”

“One of the crucial decisions was arriving at a harmonised position on the award of blocks in the JDZ 2004 licensing round, which was forwarded to our heads of government for endorsement before announcement.”

The minister, however, said that the delay was as a result of some technical hitches, even as he cautioned Sao Tome not to allow external influences to becloud her judgement.

He said, “It is pertinent to note that the more delays that are experienced, the more the credibility of this laudable partnership and brotherhood is eroded.”

“If we continue to allow extraneous factors to guide our thoughts and decisions it will seriously affect the bond of our partnership and our brotherhood which has started becoming the envy of many countries with similar situations.”

The two countries have decided to float a common vehicle, the JDA, to manage the resources in their overlapping border areas, which is now reputed as one of the prolific hydrocarbon laden zone in the Gulf of Guinea.

Bassey Udo Explains 'Long Wait' For JDZ Awards

In a well-researched article for Nigeria's Daily Independent, veteran oil writer Bassey Udo has attempted to explain the multiple reasons for the long delay of the Nigeria-Sao Tome and Principe Joint Development Zone block awards in its second Gulf of Guinea licensing round.

Here is the analysis published Tuesday by Udo, one of Nigeria's best writers on his country's oil industry:

Tuesday May 24th, 2005
The long wait for JDZ deal
by Bassey Udo

Release of results of the 2004 Licensing Round of the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ) originally scheduled for December 31, 2004 has been postponed a couple of times for inexplicable reasons.

In this analysis, Energy Editor, Bassey Udo, contends that ExxonMobil’s decision to reserve its rights in two of the five blocks on offer in the zone, the recent sack of the Sao Tomean Special Adviser on Petroleum and Energy, Patrice Traovoda, as well as last week’s resignation of the country’s Minister of Petroleum, Arlindo de Ceita Cavalho, over allegations of involvement in shady deals that compromised the bid process appear to fuel the perception in some quarters of a waning interest and credibility crisis of the exercise among investors.

ABUJA -- The eighth meeting of the Joint Ministerial Council (JMC) held in Abuja, October 28 and 29, 2004, captured the mood and enthusiasm of the two partner countries – Nigeria and Sao Tome and Principe – towards the early development of the JDZ.

Apart from the announcement of the official closure of the 2003 Licensing Round, the JMC directed the Joint Development Authority (JDA) to make necessary arrangements to conduct another bidding round with a view to awarding additional (oil) blocks within two months. This will “enable the generation of revenue that will assist the State parties in fulfilling the aspirations of their people”.

Abubakar Tanko, Nigeria’s Minister of State for Foreign Affairs in his opening remark spoke the minds of the governments of the two on the need to award new oil blocks in the zone in addition to the premier Block-1 to help “generate the desired level of activity and revenue”. Tanko, who described the meeting as “very crucial”, listed the review of negotiations of the Production Sharing Contract (PSC) for Block-1 and opening of discussions on the process for award of additional oil blocks as key items on the day’s agenda.

Timetable and guidelines

A timetable and guidelines issued at the end of the meeting for the conduct of a new licensing round indicated that five new oil blocks (2, 3, 4, 5 and 6) would be on offer between November 15 and December 15.

Prospective investors were requested to submit their bids within the period, at the end of which bids were to be officially opened, while results and announcement of winners of the oil blocks were to hold latest December 31, 2004.

The stakes were predictably high and the frenzy among prospective investors expectedly fierce, apparently as a result of the huge success recorded in the maiden round in which Chevron Corporation emerged operator of Block-1 with a whooping $123 million offer.

At the official bids opening, December 15, 2004, about N60 billion was staked from 26 bids submitted by 22 interested investors.

If things were going according to initial schedule, the results of the bids could have been released and winners emerge by December 31, 2004. But, that was not to be.

The official explanation was that there were a few issues that needed to be sorted out in respect of the Joint Operating Agreement (JOA) with Chevron Corporation and its partners in Block-1, to clear the way for the payment of the signature bonus.

Besides, it was gathered that the delay, though not originally intended, would afford the JDA sufficient time to carry out the technical and commercial evaluation of the bids before final announcement of winners.

ExxonMobil, ERHC rights

When the bids evaluation finally began, one issue that appeared to have proved a hard knot to untie was how to get ExxonMobil to agree to participate in the development of some of the oil blocks without engendering the credibility of the guidelines regulating the bid process.

ExxonMobil and Environmental Remediation Holding Corporation (ERHC) are two oil companies having pre-emptive option rights in the five oil blocks on offer by virtue of their existence in the Sao Tomean territorial waters in years predating the 2001 treaty establishing the JDZ.

ExxonMobil has 25 per cent rights in two of the five oil blocks, while ERHC, an American-based company in which a Nigerian oil firm, Chrome Energy, has major stakes, has rights ranging between 15 to 30 per cent in all five blocks.

The difference was that whereas ERHC participated in the bidding round and submitted bids for some of oil blocks, ExxonMobil did not. Yet, accommodation must be found for its pre-emptive rights by being offered equity as a joint venture partner in the event of its not willing to farm-out.

During the evaluation of the bids, ERHC had validated its pre-emptive option rights.

But, the JMC, at the end of its 9th meeting of April 26 and 27, 2005 in Abuja, issued a directive for ExxonMobil to move within 30 days to exercise its rights in two of the five blocks to pave the way for the release of the final results and announcement of the winners of the operational licenses for the five oil blocks.

After weeks of consultations and negotiations with JDA officials during which all the parties were afforded the opportunity to review the 26 bids to accommodate all interests, ExxonMobil, contrary to wide expectations, opted to reserve its rights in the two oil blocks, citing business reasons.

"We confirm that ExxonMobil has elected not to exercise its rights to participate in additional blocks that may be awarded pursuant to the current tender round in the Joint Development Zone of Nigeria and Sao Tome and Principe”, the company said in a terse statement in Lagos.

Though the company confirmed its interest to retain its 40 per cent stake it already holds in the zone’s premier Block –1 through its subsidiary, Esso Exploration and Production Nigeria-São Tomé "One" Limited, the real reason for its decision not to exercise its rights was left for conjecture, signaling the turning point in the bid process.

Why ExxonMobil reserve its rights

Sources close to the American oil firm alleged that ExxonMobil may have taken a strategic decision to protect its business interest by opting out when it became obvious that it was not going to win the argument and get the JDA to accept its proposal.

Though ExxonMobil did not submit bids for any of the five oil blocks on offer, it was gathered that throughout the month-long negotiations and consultations with the JDA, it was pushing a case for it to be granted the operatorship of the two oil blocks it was expected to exercise 25 per cent rights considering its capacity and clout in the industry, in terms of experience and technical know-how in deepwater operations.

It was gathered that the company never wanted to play a second fiddle to ERHC, which though known to have spearheaded oil and gas exploration and production activities in the Sao Tomean territorial waters since 1986, may not have been seen by industry players as possessing the kind of expertise and experience required to drive a highly challenging and capital intensive process of producing hydrocarbon in a risky terrain of about 3,000 feet on deep offshore waters, an environment that requires enormous technological and capital investments to succeed. Not even ERHC’s claim to have struck a partnership deal with some American oil firms, Pioneer Natural Resources, Devon Energy and Noble Energy could sway the argument in its favour.

“It would have been a marriage of strange bedfellows if ExxonMobil, the world's largest publicly traded oil and gas company, had accepted a position that would have seen it working in any capacity with ERHC other than as the operator of the concessions”, an industry analyst observed.

The situation reportedly triggered sharp disagreements among top officials of the Nigerian and Sao Tomean authorities, particularly what terms should be offered prospective participants in the development of the oil blocks.

Though some of the officials were said to have openly opposed any attempt to give any concession to ExxonMobil’s demand, apparently because of its obvious implications on the stipulated guidelines for the bid process, others were merely protecting their vested interests in the acreages.

A top ExxonMobil official, however, denied that its decision to reserve its right had anything to do with any rift or aversion for any company, saying: “Our decision not to exercise our right or not was informed by purely business reasons. Maybe after the assessment of the viability of the blocks, the company considered that going ahead was not in its strict business interest. It has nothing to do with anybody.”

Whether the parties involved agree or not, it would seem difficult not to appreciate the negative impact ExxonMobil’s decision not to exercise its rights would have on the initial enthusiasm and interest by investors in the development of the JDZ acreages.

JDA and reduced signature bonuses

Even the JDA appears to appreciate the reality of the waning interest among investors as it had to perk the signature bonuses for each of the five oil blocks at levels lower than the base offers during the bids to encourage participants, at least to still realise set objectives.

Whereas the highest offers as signature bonuses were $135 million, $41 million, $175 million, $37 million and $45 million for Blocks 2, 3, 4, 5 and 6, respectively, the JDA in its preliminary results to be ratified by the JMC, according to its Chairman, Carlos Gomes, perked the figures at $71 million, $40 million, $90 million, $37 million and $45 million, correspondingly.

JDZ and the Rumble in Sao Tome

Apparently to reassure prospective investors of stakeholders’ commitment to transparency and openness in JDZ transactions, Sao Tomean President, Fradique De Menezes, fired his Special Adviser on Petroleum and Energy, Patrice Traovoda, son of the country’s former President, Miguel Traovoda, one of the founding fathers of the JDZ.

Menezes accused Traovoda of ‘gross misconduct’ following allegations of his involvement in dealings that appeared to have compromised the transparency of the 2004 bid process.

According to Menezes, Traovoda was discovered to have interests in some companies that participated in the licensing round, adding that the former adviser was known to have been involved in illegal activities that tantamount to the corruption of the bid process having been linked with allegations of “promises to assist some companies that participated in the 2004 bid round.’’

Last week, apparently in sympathy with Traovoda, the country’s Minister of Petroleum Resources, Arlindo de Ceita Cavalho, resigned in controversial circumstances.

The two top Sao Tomean official, who were also members of JMC, played prominent roles in various negotiations by JDA and investors in the JDZ. The exit of the two officials will obviously complicate the problems, causing the delay in the completion of the bid process. How the problems are resolved will determine how long the parties have to wait for the realisation of the objectives the JDZ was established.

Nigerians Rescue Passengers of Sinking Sao Tome Ship

In what may be a good omen, the Internet-based Nigerian daily Business Day reported today that the Nigerian rescue of a sinking vessel from Sao Tome and Principe was enabled by the fact that Nigeria signed an international accord on maritime rescues.

The Sao Tome and Principe delegation (which has yet to sign the Joint Development Authority awards document in Abuja) was apparently not on board.

NMA, others rescue 68 passengers aboard distressed ship
by Ray Ugochukwu
2005-05-25 09:13:19

RIVERS STATE -- A Sao Tome and Principe vessel carrying 68 passengers on board was Monday rescued from sinking by a combined team of officials of the National Maritime Authority (NMA), Nigerian Ports Authority (NPA) and Marine Industrial Services Consultative Organisation (MISCO).

The vessel, MV Praque Yara, was said to have developed an engine problem on Saturday resulting in her drifting for 48 hours, 100 nautical miles off Nigerian shores, before she could be sighted by another vessel, LNG Bayelsa, at about 7.33pm on the fateful day.

Sources at the NMA disclosed that on receiving the distress call, officers from the Search and Rescue Department of the apex maritime regulatory body jumped into a Caverton helicopter and went to sea and located the ship as she was drifting with its 68 passengers, including women and children, on board.

It was gathered that a rescue boat was immediately arranged, which towed the ocean liner to the Brass Terminal in Rivers State.

BUSINESS DAY gathered that the passengers had run short of food and water before succour came their way.

Though there was no casualty, sources revealed that 12 passengers were found to have fallen sick, with six of them developing stomach pains.

Confirming the development, the NMA Director of Marine Services, A. S. Olopoenia, said since Nigeria was a signatory to the 1979 Search and Rescue Convention of the International Maritime Organisation (IMO), she was obliged to respond to any distress call from the high seas.

"We must do everything to offer assistance to calls from the high seas and within our territorial waters", the Ship Master said.

On the fate of the rescued vessel, he said that his men would not release her until the surveyors had declared it fit and safe to sail.

Olopoenia added that appropriate officers of the NMA had been dispatched to Brass through Port Harcourt, to ascertain the level of assistance the authority would further render to the ill-fated vessel.

The NPA recently commissioned its helicopter services aimed at monitoring happenings in the country's territorial waters and beyond in line with the new IMO security measures better known as the International Ship and Port Facility Security (ISPS) Code.

The helicopter services is rendered by an indigenous firm, Caverton Helicopters, which service was deployed in the rescue of the drifting ship.

US Firms Bribed Nigerians For Pipeline Job, Paper Says

The respected Mike Oduniyi reported earlier this week in ThisDay Online that a U.S. firm involved in a $600 million pipeline project says an internal audit reveals it may have bribed Nigerian officials to get the contract.

Here is the story:

Fresh Bribery Scam Hits Oil Industry
Willbros investigates WAGP, EGP contract awards
by Mike Oduniyi
with agency report,
05.23.2005

ABUJA -- Even as the dust over alleged bribe-for-gas contracts involving a unit of oil service firm, Halliburton, is yet to settle, another US oil firm, Willbros, has opened another scandal of improper payments of money allegedly to some Nigerian government officials to win contracts.

Willbros's local unit, Willbros West Africa Inc., was awarded last Deecember, the Engineering, Procurement and Construction (EPC) contract for the onshore pipeline and facilities of the $600 million West African Gas Pipeline Project by the West African Pipeline Company Limited, comprised of ChevronTexaco, Nigerian National Petroleum Corporation (NNPC), Shell, and the Takoradi Power Company Ltd. of Ghana.

The oil services firm, which has its Nigerian unit based in Port Harcourt, also bagged the $780 million contract along with South Korea's Hyundai Heavy Industries, to build the third phase of the NNPC/Chevron Escravos Gas Pipeline (EGP) project.
However, the Willbros Group said last week that an investigation by its Audit Committee into the activities of the former head of the Company's international operations, "unveiled a catalogue of dubious dealings by existing and former employees, including possible improper payments and bid-rigging in Nigeria, Bolivia, Ecuador and possibly Mexico."

The company said in a statement that Mr. James Tillery, its former president of international operations, some 12 other employees who reported to him and possibly six consultants, "may have falsified reports, compromised the company before government authorities and clients and violated U.S and foreign laws."

It said the audit discovered that Tillery and other Willbros International employees or consultants owned interests in enterprises with whom Willbros International did business, and may have usurped corporate opportunities, received payments and other improper benefits from consultants, suppliers or competitors.

"Mr. Tillery and other Willbros International employees or consultants may have directly and indirectly promised to make, made, caused to be made, or approved payments to government officials in Bolivia, Nigeria and Ecuador," the statement said.

The company said that it had reported its findings to both the US Securities and Exchange Commission (SEC) and the US Department of Justice, which have already launched investigation into the allegations.

"Bad behaviour and collusion defeated our system of internal controls," said Willbros chief executive Michael Curran. "It is like a spread of cancer that has gone to different places in our organisation," he added.

The company said that as as a result of the problem, it would have to restate its financial statements for the 2002 and 2003 fiscal years and the first three quarters of 2004.

For the first quarter, it expects to post bewteen $5 million to $7 million loss, including the $4 million cost of the investigation.

"Until the investigation is complete, Willbros will not be able to fully assess the impact of these actions on the Company. The Company is working diligently to complete this investigation in the near term," it said.

The Willbros' WAGP project includes the installation of custody transfer metering in Nigeria and a 30-inch natural gas pipeline from the existing Escravos Lagos gas pipeline system, near Itoki, Nigeria, to the initial compressor station at Lagos Beach, and the point of departure for the offshore section.

Additional pipelines and regulating and metering facilities for the onshore portions of the project in Benin, Togo, and Ghana are included in the project scope, as well as the engineering, procurement, construction and tie-in of the initial compressor station and land pipeline section.

Groundbreaking ceremonies for the project were held at Takoradi, Ghana, on December 3, 2004. Engineering and procurement activities for the onshore portions were expected to commence in January, 2005, with field activities scheduled to begin in the fourth quarter of 2005, and project completion in the fourth quarter 2006.

For the EGP 3 Project, the contracts cover the construction and installation of offshore platforms and pipelines, as well as an onshore gas plant expansion and floating storage and offloading modifications, the statement said.

The third phase of the plant is expected to provide about 330 million cubic feet of natural gas per day for the Escravos Gas-To-Liquids project.

The House of Representatives is currently investigating alleged payment of $180 million bribe by a unit of the US oil services firm Halliburton, KBR, to Nigerian officials, to clinch gas contracts.

U.S. Govt. Report Says Nigeria Will Vanish Within 15 Years

The United States National Intelligence Council, a body of senior intelligence community officials, has issued a report flatly stating that Nigeria will have vanished from the roster of nations within 15 years, the ThisDay Online Website reported. President Olusegun Obasanjo sharply criticized the report.

Since the appearance of CIA Director Porter Goss, a former Congressman from Florida and onetime CIA analyst, before the Senate Intelligence Committee last Fall, the nation's intelligence community has been warning of an imminent collapse of Nigeria, the world's fifth-largest oil producer and the largest in Africa.

ERHC On The Move believes the report's emergence was likely the work of lobbying by ExxonMobil, which is angry that its non-bid for Block 4 of the Joint Development Zone was not accepted by the Nigeria-Sao Tome and Principe Joint Development Authority because it was months late, and in a fit of pique declined to exercise its right to two 25 percent preferential options in any of the five blocks currently on offer.

Update, 9:35pm EDT, 5/26/05: In a response from the American consul in Nigeria, the federal government was urged not to merely dismiss the report or consider it an affront. In essemce, the American official said, things can change. Here is the response story:

U.S. urges Nigeria to take intelligence report seriously
The United States (US) has urged the Federal Government to take the recently released report of its National Intelligence Council (NIC) very seriously and not consider it as an affront of any sort. The report entitled, mapping Sub Saharan Africa's future which had already drawn a presidential remark, had among others hinted of a high possibility of a break up of Nigeria. Briefing reporters in Abuja on Thursday, the U.S. country public affairs counsellor for Nigeria, Mrs Claudia Anyaso, said that grave as the 17 paged report appears, there are always the time honoured "interventions along the line that could change and save things provided well meaning citizens, do not just sit back and do nothing." The American counsellor's detailed clarification were elicited at a joint briefing with Democracy and Governance Officer of the US Agency for International Development (USAID) Mr. Stephen Herbaly which sought to x-ray USAID's support for civil society in Nigeria and a new programme budgeted to hit $8 million in the next five years.

Thursday's Vanguard also had a story on the report. Here are the first two paragraphs of that story:

Obasanjo denounces US intelligence reports
by Emmanuel Aziken
Posted to the Web: Wednesday, May 25, 2005

ABUJA — President Olusegun Obasanjo has denounced a United States Intelligence assessment of Nigeria as a nation heading towards failure, and vowed to prove the lowly report on Nigeria as a product of the prophets of doom among the US intelligence community.

President Obasanjo reacted in a letter conveying to the Senate the report of the United States Intelligence Council in which Nigeria was rated as being managed by leaders at war with one another and headed towards possible self-implosion.

A high-ranking official in the region hinted earlier this week that "major oil interests" were behind much of the disruption being experienced in the JDA's second licensing round of oil-rich blocks located in the Gulf of Guinea Joint Development Zone, where ownership is shared on a 60:40 basis by Nigeria and Sao Tome and Principe under a 2001 treaty.

Here is the ThisDay Online story from May 25 editions:

US Intelligence: Nigeria 'll Fail in 15 Years
They are living in the past, says Obasanjo
by Kola Ologbondiyan
05.25.2005

ABUJA --The United States National Intelligence Council in a document entitled "Mapping Sub-Saharan Africa's Future" has predicted "outright collapse of Nigeria" as a nation-state within the next 15 years.

In a swift response, President Olusegun Obasanjo described the prediction as "glib(ly) talk" arising from "dubious or diabolical benchmarks."

On page 17 of the report under the heading "Downside Risks," the US Intelligence claimed that "while currently Nigeria's leaders are locked in a bad marriage that all dislike but dare not leave, there are possibilities that could disrupt the precarious equilibrium in Abuja.

"The most important would be a junior officer coup that could destabilize the country to the extent that open warfare breaks out in many places in a sustained manner. If Nigeria were to become a failed state, it could drag down a large part of the West Africa region.

"Even state failure in small countries such as Liberia has the effect of destabilising entire neighbourhoods. If millions were to flee a collapsed Nigeria, the surrounding countries, up to and including Ghana, would be destabilised. Further, a failed Nigeria probably could not be reconstituted for many years - if ever - and not without massive international assistance.”

According to the introductory part of the report captioned "summary", "the National Intelligence Council recently convened a group of top US experts on Sub-Saharan Africa to discuss likely trends in the region over the next 15 years. The group discussed several major issues or drivers that will affect Africa, including globalization and its impact on political development and economic growth, patterns of conflict, terrorism, democratisation, etc.

Obasanjo's 7-paragraph reaction to the document dated May 17, 2005, which was addressed to Senate President Ken Nnamani, and read on the floor was titled "Report of the US Intelligence Council."

It read: "As a means of informing ourselves, I hereby forward a copy of the United States National Intelligence Council document on "Mapping Sub-Saharan Africa's Future" for your attention. I am sending this to you not because I am alarmed by the report but because if we know what others think of us and about us, we can prevent what they project for us.

"As a person who has participated in similar so-called "expert group" on issues, situations and regions, I know that the predictions and projections can be wide off the mark because both politics and economics cannot be absolutely predicted and their dynamics can fool the greatest and best expert. But it is important for us to know that we are being rated low, not because of what is happening to us from outside but because of what we do to, for and by ourselves internally.

"I believe that it is only God and ourselves that can map our present and future. No outsider can do that accurately for us. I know that some people glibly talk of the probability of Nigeria as a failed State. I believe that they are living in the past and incapable of noticing and appreciating the positive strides we are making on all fronts and the determination of the Nigerian people to join hands to consolidate democracy and promote sustainable growth and development.

"Because they are stuck to old ideas and dreams as well as stereotypes about us and our capabilities, they cannot see the New Nigeria that we are building collectively as we move beyond the past but allowing the past and present to strengthen and sustain our future.
"Similar experts at the beginning of the second half of the 20th Century predicted worse scenarios for South East Asia. In fact, at the dawn of independence in Africa, Africa's chances were rated much better than that of South East Asia, but because they pulled themselves together, the predictions and projections about them have been proven false. In the case of Africa, the reverse has been true as the early favourable predictions and projections for the continent have remained largely unattained.

"If our detractors cannot see our far-reaching reforms, our fight against waste and corruption, the new culture of prudence and service delivery that is gradually emerging, the various political reforms including the on-going National Political Reform Conference as well as the sacrifices our people are making to ensure economic progress and democratic consolidation as indicators of progress and a radical departure from the past, then they must have some dubious or diabolical benchmarks for measuring efforts at ensuring oneness, unity, stability, indivisibility, prosperity, development and growth of our dear country.

"Our performance in the last three years has, in my view, been very good just as our performance in ensuring stability, peace, economic progress and good governance in West Africa and, indeed, the whole of Africa.

"I believe that we can and should disprove the modern experts of the United States Intelligence Council who are like the prophets of doom and by the Grace of God, for Nigeria in this first decade of the 21st Century, we must be determined to show that we are neither a basket case nor walking on a banana peel.

"I wish you well as you read the report and would very much appreciate your reactions, perspectives and suggestions. For me, it is a challenge and it calls for extra work. We owe that much to our people, to Africa, humanity and to God Almighty, our Creator. May God bless Nigeria and Africa.”

Money.net Reports 1.2 Million Shares Traded After Hours; Bad Data Suspected

The Level II financial reporting system Money.net says about 1.2 million shares traded well after closing today and brought the price down to $0.695, erasing the small gain the stock had enjoyed on the day. However, the data could not be substantiated on other financial sites, however, including the New York Times, E*Trade and ADVFN, and a poster in our Comments section points out the figure matches last Friday's volume, not today's.

According to the site, which does have service interruptions at times, 2,067,200 shares traded, but the site puts the time of the last trade at 23:59:47, or 13 seconds before midnight, which has not yet arrived.

Extended hours trade reporting is spotty throughout the financial world. The New York Times Business page on its Cybertimes Website (www.nytimes.com, by registration only) does not confirm the trade, but both the Times and the ADVFN system say some 7,500 shares traded after hours. ADVFN and Money.net at the closing showed the Bid and Ask at $0.702, but Money.net reduced it to $0.69 x $0.695 well afterwards.

After hours trading can occur up to 8pm in most stocks on E*Trade, but that broker showed no after-hours trading in ERHE at all. The broker accepts only limit orders in extended hours and charges a fee of $0.005 per share on top of its regular commission.

JDA Could Be Dissolved, Tanko Hints

The Nigeria-Sao Tome and Principe Joint Development Authority could be dissolved if Sao Tome does not move towards a consensus with Nigerian delegates to the Joint Ministerial Council, a high-ranking Nigerian foreign affairs official said as the second day of JMC meetings with Sao Tome and Principe officials got underway this morning.

JMC member and Nigerian deputy foreign minister Abubakar Tanko said the "bond of partnership" with Sao Tome would be "seriously affected" if Sao Tome and Principe delegates continued to delay announcement of the block awards negotiated by the JMC three weeks ago after a five-month delay in announcing them.

The last licensing round, for nine blocks, ended in chaos as one block got awarded and the rest were put out for rebid more than a year after awards were anticipated.

Meanwhile, there was no announcement at the end of the business day in Abuja, and a press release promised by the Joint Development Authority has not appeared on its Website. It is common for the JDA to promise things but fail to deliver for days, weeks or even months, and it has done so countless times since last year through its spokesman Sam Dimka and its official Secretary.

News reports published by Reuters and others said the "integrity of the process" was at stake. The endless delays have frustrated investors and outraged Nigerian officials, who signed off on the proposed award of Blocks 2 through 6 in the oil-rich Gulf of Guinea's Joint Development Zone at the beginning of the month and expected Sao Tome President Fradique de Menezes to do the same.

Instead, upon receipt of the award documents de Menezes was forced to follow a circuitous legal path mandated by a new petroleum law through the National Petroleum Council, the National Petroleum Agency and Sao Tome's parliament, and began shedding officials through resignations and firing as soon as the process began.

Even de Menezes resigned as head of the NPC after he had also accepted the resignations of oil minister Arlindo Carvalho and foreign minister Mateus Meira Rita, and he fired Equator Exploration lobbyist Patrice Trovoada, the son of the immediate past president of Sao Tome, as his special presidential advisor on oil after agreeing that Trovoada had a serious conflict of interest as a member of the country's Joint Ministerial Council delegation which negotiated the awards.

Sao Tome borrowed $44 million from Nigeria based on its expectation of getting a $49 million share of the $123 million Block 1 signature bonus fee paid into a Nigerian bank account by ChevronTexaco, ExxonMobil and two independents, Norway's financially-troubled Energy Equity Resources (EER), which originally had a 9 percent share of Block 1, and Afren, a Nigerian firm that bought half of EER's share when the former was forced to sell. The bank deposit broke the rules of the JDA agreement, known as the Abuja Accords, and Nigerian foreign ministry officials have stated that payment of the funds, which they now control, is contingent on Sao Tome's signature on the awards document.

The two spokesmen for the delegations went head-to-head in the press via a Reuters interview in which Carvalho said that "when we went home after a deep analysis we came to the conclusion that some things needed to be done," while Tanko seemed determine to preserve the original list of award-winners.

"If we continue to allow extraneous factors to guide our thoughts and decisions it will seriously affect the bond of partnership," Tanko told Reuters ahead of the the second day of meetings.

The consequences of dissolving the rickety, almost unworkable partnership between Nigeria and Sao Tome would slow the awards process and permit lawsuits to prosper as the two countries fought for their fair share of the Gulf of Guinea Joint Development Zone. That is likely a battle that Nigeria would eventually win.

Victory could come at a difficult time for Nigerian President Olusegun Obasanjo, however, as his party faces new presidential elections in 2007, as does de Menezes' MDFM party in Sao Tome.

Obasanjo may soon become embroiled in an impeachment trial, and de Menezes faces a thoroughgoing investigation he has ordered into the failure of the first awards decision three weeks ago due to conflicts of interest alleged against him and several members of his cabinet. He in turn has charged that corruption was involved in earlier opposition party decisions about the JDA and has vowed to uncover it.

A "transparency" law written by students at Columbia University has become the nexus for political maneuvers that could now kill the "golden goose" that oil was expected to become for Sao Tome. There is little doubt that the former Communist Party officials who run the Movement for the Liberation of Sao Tome (MLSTP), now the ruling party in Sao Tome's parliament, who are avowed Marxists, would forego the money to gain political power through embarassing the MDFM president ahead of elections.
That is not true in Nigeria, where corruption is an accepted way of life and where an effort to stem it has backfired with potentially serious consequences for Obasanjo.

Opposition to both men is well-organized in their respective countries, so that a failure to deliver awards now could well mean they would not be made within the coming year but would await the outcome of the 2007 elections in both countries when officials could determine who has the upper hand in the political process and then proceed accordingly.

Phil Nugent Sues To Break Up His Partnership As GEECF Heads South

Phil Nugent, the man who claims to have introduced Emeka Offor to Sao Tome and who was tied in a recent Barron's Weekly article to attorney Donald Mintmire, a Palm Beach stock promoter arrested by IRS officials last May, claims in a letter to ERHC On The Move that he filed suit May 9 in Federal Court to break up his partnership with the company that has burned through $210 million in a matter of months and seen its share price drop from a recent high of $2.88 to $0.40.

The New Orleans-based oilman also threatened to sue ERHC On The Move for intimating he had a management or equity role in the company. ERHC On The Move mistakenly reported that Nugent "is battling to save his newest enterprise, Global Environmental Energy Corp." In fact, he is apparently fighting to undo his relationship with it after former Irish Prime Minister Albert Reynolds bailed out of the company,as posted here on May 14. Our headline correctly said he "faces issues" with the company.

In a letter posted in our Comments section and then reprinted last week, Nugent's lawyers says, "For you to flatly state that Mr. Nugent or his company, ERHC, has any management or ownership interest in Global Environmental, a company that is described as insolvent and facing numerous punitive damage and director/investor actions against it, as well as possible tax liability actions, is not only patently libelous but could be characterized as an intentionally tortuous act... ."

Nugent's lawyer, Cameron Gamble, apparently cannot spell "tortious" correctly. The letter was posted as received and is still available below.

The Barron's article on GEECF linked Nugent to a Palm Beach lawyer who was convicted of stock fraud and lying to the Securities Exchange Commission, saying that Nugent and another ERHC Energy investor were part of the same cast of characters who have invested in ERHC Energy.

Today, when we suggested that his problems with GEECF as evidenced by the lawsuit he claims to have filed may have led to substantial losses that could require him to sell his ERHC Energy holdings, someone posted the letter again, this time with a valid local address and signed by an apparent lawyer, Cameron Gamble. No hard copy of the letter has been sent to us, That response reinforces the possibility we suggested that Nugent himself is behind the selling that has continually depressed the share price.

Nugent had earlier thanked ERHC On The Move for an article that distanced him and GEECF from ERHC Energy, and had instructed his son, lawyer Phil Nugent, Jr., of New Orleans, to ask if we would be interested in co-authoring a book with the elder Nugent and a Cambridge, Mass.-based academic writer, Daniel Yergin, on the history of his role in ERHC Energy (formerly Environmental Remediation Holdings Corp.), and sent us a small box of pecan pralines in gratitude.

We are unsure what turned him against us, but we now intend to publicize his relationship with GEECF and the attendant lawsuit at every opportunity.

Here is a portion of a year-old Mintmire story from a Florida newspaper:

Palm Beach Lawyer Arrested In Alleged Citrus-Stock Scam

POSTED: 12:27 pm EDT May 21, 2004
UPDATED: 12:42 pm EDT May 21, 2004

WEST PALM BEACH, Fla. -- A Palm Beach attorney will be arraigned for his role in what the Internal Revenue Service is calling a citrus-stock scam.

Donald Mintmire was taken into custody on Thursday at his Palm Beach law office, where investigators took out more than a dozen boxes filled with records. Mintmire is accused of dissuading potential witnesses from telling the truth.

IRS officials said Skip Clements, the owner of Clements Citrus blew the whistle on Mintmire.

Clements made a fast climb in the citrus business with sales skills that convinced even the Chinese government to buy his orange juice.

"I mean, that's pretty damn good. So, there's a lot of people around town saying 'I want a piece of that dream,'" Clements said.

The dream vanished for Clements and investors a short time after the company went public. Money intended for the company's growth seemed to disappear.

Clements said he discovered what investors had never been told: that their Stocks couldn't be traded for two years and, it appeared the money had gone to the pockets of only a handful of executives.

"I was sick to my stomach," Clements said. "I didn't know what to do."

Clements, the company's founder and the man with his name on the label, filed a complaint with the Securities and Exchange Commission and federal prosecutors.

"I couldn't let (the executives) get away with it. I couldn't let them beat people that trusted me," Clements said.

Board members fired Clements for making the complaint. Clements aid Chief Financial Officer Joseph Rizzuti made sure Clements would not receive unemployment.

But federal officials listened to Clements' story and launched a grand jury investigation that lasted almost a year.

A grand jury will decided whether criminal activity led to the company's failure.

"The prosecutor told me once there was only one mistake these people made when they did this whole thing and I said 'What's that?' He said, 'They didn't count on you walking away,'" Clements said. "That paper trail will put them all in prison for a long time. That paper trail will prove they're all lying."

Trading Updates: Both Sides Ready For Results

Both sides in the new Nigeria-Sao Tome and Principe Joint Ministerial Council meeting indicated they were ready for results from the second licensing round of choice oil blocks in the Gulf of Guinea Joint Development Zone, and ERHC Energy (OTC BB symbol: ERHE) investors are even readier.

Trading should be brisk today - but we'll know in a moment.

Trading Updates
Update, 5/25/05, 4:01 EDT: Volume has climbed sharply since the 3:15 Surge, to 777,940, and the price is $0.702 and the Bid and Ask $0.70 x $0.702. ERHE gained $0.002 on the day. ADVFN reports that as of 3:40, there were 146 trades today running strongly to the Buy side, but not as strongly as earlier. There were 383,250 Buys and 206,650 Sells and 30,360 shares unidentified.

Update, 5/25/05, 3:08 EDT: Volume has slowly climbed to 558,525, while the Bid and Ask remain $0.695 x $0.70, and the price is $0.70 just five minutes for the 3:15 Surge..

Update, 5/25/05, 12:47pm EDT: Buyers are becoming still more dominant. In the first 105 trades of the day at 12:28pm EDT, there were 301,175 Buys and 73,025 Sells, with 30,360 unidentified, according to ADVFN, which has a 15-minute delay. Volume at 12:47 is 462,560, and the price is $0.70, with both Bid and Ask improved to $0.70 x $0.702.
.
Update, 5/25/05, 12:35pm EDT: Please read my latest Comment if you want to know what I think about today's meeting. The price is unchanged at $0.70, with volume now at 409,560 and the Bid and Ask unchanged at $0.696 x $0.70. Nothing new on the JDA Website. Now I'm going to Morty's for lunch.

Update, 5/25/05, 12pm EDT: With trading stalled at noon, and the JDA PR still not online, we're headed to Morty's Bagels in Palmetto, Fla., for lunch of great homemade bagel sandwiches and pastries from Tim and Antonieta O'Dea.

The volume is still 337,275, and the Bid and Ask remain at $0.696 x $0.70, with the price at $0.70.

The U.S. Senate has just started voting on Priscilla Owen's nomination to the U.S. Court of Appeals.

Update, 5/25/05, 11:48am EDT: The price is $0.70 in ho-hum trading, Volume has climbed just 7,000 shares in 30 minutes. The Bid and Ask are unchanged at $0.696 x $0.70.

Update, 5/25/05, 11:18am EDT: The price is $0.696, the new Bid, and the Ask remains at $0.70. Volume is tepid at 330,395. We have a picture of the crowd outside the JDA offices awaiting the news that will display here shortly.


SwingingK, ever vigilant...
A crowd has gathered outside the offices of the Joint Development Authority in Abuja, where members of the Nigeria-Sao Tome Joint Ministerial Council are debating block awards for the second time this month. A JDA PR is expected today or tomorrow. Photo credit: "La Lucha," a new DVD documentary of the Mexican sport of "lucha libre" wrestling.

Update, 5/25/05, 10:56am EDT: The last 18 trades ran 15 Buys to three Sells, or 5:1, according to ADVFN. The price is still $0.70, and volume has now reached 311,332. The Bid and Ask are unchanged at $0.695 x $0.70.

Update, 5/25/05, 10:48am EDT: In the last 41 of 66 trades, only 8 are Sells. There are 33 Buys, and the Buy - Sell ratio still is better than 3:1. That's according to ADVFN, which is on a 15-minute delay.

Update, 5/25/05, 10:45am EDT: Volume is 298,042 shares, with the price still at $0.70.

Update, 5/25/05, 10:41am EDT: I hear a distant voice saying, "We have bad news." I need to get more sleep. Volume is 285,542 and all else is unchanged.

Update, 5/25/05, 10:40am EDT: We're back at $0.70, with volume still slow at 275,042. The Bid and Ask are unchanged.

Update, 5/25/05, 10:37am EDT: The Buy - Sell situation is remarkably tilted to the long side, with 126,357 Buys to 39,400 Sells in 51 trades as of 10:17; there are 20,360 shares unidentified. The price has fallen to $0.699, and the Bid to $0.695, while the Ask is lower at $0.70.

Update, 5/25/05, 10:34am EDT: This yawning $0.002 "gap" frustrates me. Why doesn't some market maker demand what ERHE is worth? Volume has climbed to 261,542, suggesting that as the end of today's meeting and a JDA PR grow closer, there will be a rush for the rafters.

Update, 5/25/05, 10:27am EDT: We're at $0.702, the Ask, with the Bid still at $0.70 and volume approaching 200K, at 198,117. It's Dullsville out there, folks.

Update, 5/25/05, 10:25am EDT: GEECF, where ERHC investor Phil Nugent is trying to dissolve his partnership agreement, hit $0.40 this morning and is now at $0.41, off $0.07. So much for resistance at $0.48.

Update, 5/25/05, 10:20am EDT: The Buy - Sell ratio has swung more firmly to the Buy side now. In 30 trades, 24 are Buys, and just six are Sells.

Update, 5/25/05, 10:18am EDT: The price is $0.7020, a twentieth of a cent lower, with volume at 186,117 and the Bid now at $0.70. The Ask is $0.702.

Update, 5/25/05, 10:14am EDT: The price is $0.7025, a healthy innovation. The Bid is still $0.695, but the new Ask is $0.704, as if that made any sense. Volume is 164,017, moving at last.

Update, 5/25/05, 10:09am EDT: Buyers are outrunning sellers 3:1 this morning, with ADVFN (on a 15-minute delay) reporting 59,590 Buys and 18,150 Sells in the first 23 trades. Someone's got brains.

Update, 5/25/05, 10:03am EDT: The price has slipped four-tenths of a cent to $0.695, and then come back to the Ask at $0.699. Volume is a meager 88,940 shares.

Update, 5/25/05, 10:03am EDT: About 5K shares have traded, with volume now at 82,940 and the price, $0.699, the Bid (the same) and Ask, $0.699, all unchanged. It appears traders are not chomping at the bit, but the JDA PR will spark a riot (i.e., a really strong rally), we think.

Update, 5/25/05, 9:58am EDT: We think the following update from SwingingK is probably the real thing this time. His named source declined to say when awards will be, but says we can expect a Joint Development Authority press release:

*********YEAH**********

Just got off the phone with Kashim Tumsah, He is the JDA's Legal guy. Was asking him some PSC questions regarding Blk 1, & how that would affect the Drafting of Blk's 2-6, He responded, " We are so glad to finally have settled the matter of whom actually is awarded which block, the PSC should be a snap, 90% of it is Boilerplate from the Block 1 PSC."

I then asked him if Awards will be anounced today since in your own words you finally settled on whom gets awarded what. KT responded, " A PR will be issued as soon as the JMC Draws to a close."

Update, 5/25/05, 9:51am EDT: Very, very slow trading today, but we think the meeting may yet be a short one. Volume price, Bid and Ask are unchanged. It reminds me of July, 2003.

Update, 5/25/05, 9:47am EDT: A fresh and much appreciated Update from Anonymous (you know him):

****UPDATE AWARDS****

Just spoke with Secretary of JDA. I asked him if the Gomes quotes about awards this week and the Reuters article were accurate and he said they were indeed accurate. I asked him if awards would be announced this week and he said yes and that there would be a PR most likely today/tomorrow. JMC is to start meeting in about an hour.

Price, Bid and Ask are unchanged as volume reaches 77,740.

Update, 5/25/05, 9:42am EDT: We added an extra "3" to the volume figure - sorry. Now it's 47,040 and motionless. The price, Bid and Ask are unchanged.

Update, 5/25/05, 9:37am EDT: The price is a tenth-cent lower at $0.699, 44,450 shares trading so far. The new Ask is $0.699.

Update, 5/25/05, 9:34am EDT: Well, not brisk as only 24,040 shares trade in the first three minutes. The price is $0.70, the fallen Ask, and the Bid is $0.695.

Reuters: Carvalho Wants Changes

The Reuters news agency quotes resigned-and-rehired Sao Tome oil minister Arlindo Carvalho as saying Sao Tome wants to close the books on the long-delayed results of the second Nigeria-Sao Tome Joint Development Zone licensing round, but that that "some changes" are needed to bring that about.

When Carvalho talks about changes, it resonates to most investors as "ERHC Energy." But some Sao Tomese were known to be upset about awards to Nigerian indies Godsonic, A&Hatman, Momo Petroleum and Conoil, each of which has a powerful Nigerian figure as its sponsor and none of which have drilling experience, nor, some say, the financial wherewithal to support a drilling regime.

With the knowledge and consent of his government, the oil minister is apparently a shareholder in sme of the companies involved in the JDZ bids, and he is a member of the ADI party associated with fired Sao Tome presidential oil advisor Patrice Trovoada, a "still-powerful" figure who lobbied too hard for larger participation by Equator Exploration (EEL) and was fired for it.

On Monday, Sao Tome President de Menezes said Carvalho needs to stay on the job, among other reasons, so that investigators can examine his portfolio.

Meanwhile, a veiled warning to the Sao Tome delegation was apparent in the words of Abubakar Tanko, a Nigerian deputy foreign minister and JMC member who is apparently saying, "Don't push us too far."

Here is the Reuters piece, slightly truncated:

Wed May 25, 2005
8:28 AM GMT+02:00
Sao Tome/Nigeria to award oil blocks after delay
By Felix Onuah

ABUJA (Reuters) -- Sao Tome and Nigeria expect to make a final decision on the long-awaited award of oil exploration licences at a meeting in Nigeria that began on Tuesday night, a Sao Tome official said.

A five-month delay in awarding five licences, located in a highly prospective offshore region in the Gulf of Guinea which is jointly administered by the two countries, has raised questions over the integrity of the process, Nigeria said.

"We hope this meeting will conclude our decisions for the award of the oil blocks," said Sao Tome Minister of Natural Resources Arlindo Carvalho. "We could not achieve this in earlier meetings because when we went home after a deep analysis we came to the conclusion that some things needed to be done," he added, without saying what.

. . .

Nigeria's junior minister of foreign affairs, Abubakar Tanko, said the delays were eroding credibility in the licensing process.

"If we continue to allow extraneous factors to guide our thoughts and decisions it will seriously affect the bond of partnership," Tanko told reporters before the meeting.

Trading Updates: Platts Reports On JMC Meet; ERHE's Price Is Higher On Low Volume; Sao Tome Delegation Arrives In Abuja; The Latest Lusa Report

With little action in the first half hour, ERHC Energy (OTC BB symbol: ERHE) shares have risen slightly this morning as investors await more news from Abuja of the reconvened Joint Ministerial Council meeting on block awards.

There is also a new report from Platts Oil, one of the world's most reliable sources of information on the energy industry. The new item in the Platts story is that Sao Tome officials had told the paper the awards could be delayed "two months." That news was never reported in anything we've ever seen. It appears below the Trading Updates.

Trading Updates

Update, 5/24/05, 4:25pm EDT: Buys narrowly edged out Sells today in 132 trades, with 328,337 to 320,694 and 12,500 unidentified shares there to make the difference. For the first time in a while, trading closed at 5:57:04, about three minutes ahead of the bell. All of this points to a balance of expectations that is very near even. In the final few minutes ERHE traded more Buys than sells, but the last big trade was a 22,500 sell. The blue flag was apparently a pumper's trick - no news has appeared by 4:25pm EDT.

Update, 5/24/05, 4pm EDT: No news yet, although some on RB says a blue news flag is lit beside our symbol. Pumpers often say that to escape with an extra few cents in day trading. The price is $0.70, and volume has climbed - mostly in Sell volume - to 661,531 shares. The Bid is still $0.695 but the Ask has risen near the close to $0.703. Buys still lead Sells by about 13,000 shares today, per ADVFN on 15-minute delay. Of the last 41 trades recorded by ADVFN at 3:38pm EDT, 29 were Sells and 12 were Buys, with the Sells totalling 205,296 shares against Buys of just 59,385. It's hard to say if that was the sound of day traders exiting, margin calls falling or just a plain ol' sell-off. No news by 4:11 to back up that blue flag business.

Update, 5/24/05, 3:40pm EDT: Okay, we're back at $0.70, the Ask, on 617,581 shares of volume. The Bid is still $0.695.

Update, 5/24/05, 3:36pm EDT: I think "ironed out" may be the operative phrase about bid disputes. Let's see - hopefully soon.

Update, 5/24/05, 3:32pm EDT: We're at $0.685 again, and the Bid has improved to $0.695 while the Ask has risen to $0.70 on volume of 610,066 shares, a noticeable leap at last.

Update, 5/24/05, 3:29pm EDT: Volume is up a few thousand shares to 562,439, while the price is better at $0.69, the imporved Bid, with the Ask better at $0.695. I feel the JMC meeting could end quickly, even after just one meeting.

Update, 5/24/05, 3:26pm EDT: A 3K surge? I don't think so. Turns out the big trading after lunch was mostly due to a margin call that left oilman down 88,000 shares, he says. Meanwhile, it's 8:25pm EDT in Abuja: Do You know where your block awards are?

The price is $0.6810, the Bid, the Ask is at $0.69, and volume is 558,819 shares.

Update, 5/24/05, 3:11pm EDT: Buying has dominated trades today, although sellers have produced some volume in the past two hours. The ADVFN systen, reporting with a 15-minute delay, shows 295,752 Buys to 252,162 Sells with 7,500 undecided in a total of just 116 trades as of 2:47pm EDT.

Update, 5/24/05, 3:05pm EDT: I dreamed I invited a nun to lunch. Borrrrinnnnggg!

205 shares traded. The price has fallen to $0.6810, the Bid, and the Ask is at $0.69. The 3:15 Surge looks like a losing proposition.

Update, 5/24/05, 2:52pm EDT: Trading has livened up as I snoozed, but the price is just $0.69, the Ask, while the Bid has fallen to $0.681 and volume has reached 555,414 shares.

Update, 5/24/05, 1:59pm EDT: 2K more shares traded, bringing volume to 340,650, and the price to the current Ask, $0.699. The Bid stays at $0.695.

Update, 5/24/05, 1:56pm EDT: After an hour of inactivity, 11,500 shares have traded. The first was a 1K trade which dropped the price to $0.695, the current Bid, and the Ask to $0.699. The current price is also $0.695. Volume is 336,350.

Update, 5/24/05, 1:48pm EDT: There are 300 shares missing from the ADVFN count, but other than that, nothing at all has happened in a solid hour.

For those going to Sao Tome to celebrate their newfound fortunes, here is inside info on the drinking situation, from South Africa's daily Mail & Guardian:

In the postage-stamp-sized country of Sao Tome and Principe is an idyllic Garden of Eden island where you walk along a suspended bridge to get to the dining room on an even smaller island. Here both vodka and tonic are plentiful. Beer? Yup. Wine? Forget about it.

Update, 5/24/05, 1:31pm EDT: Nothing has changed in the past 40 minutes. Volume may finish at a record low for the month so far, unless news emerges from the JMC meeting if it breaks up before 9pm Abuja time (4pm in New York).

Update, 5/24/05, 12:51pm EDT: We're still at $0.70, and the volume, remains unchanged as well. The Bid is $0.69.

Update, 5/24/05, 12:51pm EDT: The price is $0.70 again, up a penny from yesterday's $0.69 close, and the Ask is slightly better at $0.70. Volume remains slow at 325,435, but most of the action remains definitively on the Buy side, with 212,152 Buys to 89,783 Sells in 67 trades as of 12:31 this afternoon.

Update, 5/24/05, 12:34pm EDT: The price is slightly improved to the Bid, $0.693, and the Ask remains at $0.695. Volume has only now reached 301,935, lagging far behind recent days.

Update, 5/24/05, 12:10pm EDT: On ADVFN 15-minute delay, the Buys are more than double Sells, 198,052 to 84,783 in just 62 trades (with none unidentified).

Update, 5/24/05, 12pm EDT: The volume is a mere 282,835 and the price remains at $0.69, with the Ask at $0.695. Trading is unusually static today, undoubtedbly because of the uncertainty associated with the reconvening of the JMC to revisit the block awards. We expect the meetings to be somewhat perfunctory and to ratify the original awards, possibly excepting the percentage to EEL.

Update, 5/24/05, 11:04am EDT: We would appreciate it if readers would forward us any reporting that suggests Arlindo Carvalho is an ERHE shareholder. We believe such comments are in error, and may have been confused with ERHE shareholder Mateus Meira Rita, another Sao Tome official who resigned from the JMC.

The price is $0.69, the Bid, and the Ask remains at $0.695, while volume is still low at 263,135 shares.

Update, 5/24/05, 11:31am EDT: The price is $0.695, the Ask, and the Bid remains $0.69 on continuing sluggish volume of 259,135 shares.

Update, 5/24/05, 10:15am EDT: An update from Abuja lets us know that the Sao Tome delegation has arrived for this evening's meeting of the Nigeria-Sao Tome and Principe Joint Ministerial Council. Thanks!

The price is $0.695, the Ask, and the Bid is at $0.69. Volume has reached a slow 229,895 shares.

Update, 5/24/05, 10:15am EDT: The price is $0.70, the Ask, and the Bid is close at $0.698, with volume of 184,250 in the first 45 minutes.

Here is the Platt's Oil report:

Nigeria, Sao Tome meet in Abuja to resolve block awards row

Paris (Platts) 24May2005 -- Nigerian and Sao Tome authorities plan to hold a meeting in Abuja later Tuesday to patch up frazzled relations between the two countries over the award of five oil blocks in a shared zone that is believed to hold up to 6-bil bbl of oil. "There is a meeting of the Joint Ministerial Council today in Abuja. At this stage, I don't know what the situation is in Sao Tome. Our only hope is that we can resolve the issues," Carlos Gomes, chairman of the Joint Development Authority, set up to manage the oil licensing round, told Platts.

Sao Tome authorities are unhappy with JDA's recommendations allocating various stakes in the blocks to several Nigerian indigenous companies, which they allege have close ties to the presidency, and have called for a review of the proposals. The JDA, according to Nigerian reports, awarded a 20% stake in the most-sought after Block 4 to Mike Adenuga's Conoil and a 5% interest to a company called Godsonic. Momo Oil and Gas picked up a 5% in Block 2, while Equinox Oil and Gas was awarded 10% in Block 3.

Nigeria's president Olusegun Obasanjo has endorsed JDA's recommendations, while his oil adviser Edmund Daukoru traveled to Sao Tome last Friday where he accused the country of "politicking with purely technical matters," the Nigerian ThisDay newspaper said. Gomes dismissed the claims by Sao Tome, adding that the JDA had followed the rules guiding the 2004 Licensing Round of the Joint Development Zone. "We have done our job at the JDA, the technical work has been done. It is now up to the ministerial meeting this afternoon," he said.

Daukoru, speaking to Platts before he left Abuja on Friday, said the JMC, made up of 12 members drawn from the two countries, had endorsed the recommendations as they stand and he was confident the awards would soon be announced. "If as a result of these political developments, they want to take a better look, I think our position would be to urge them not to delay too much," Daukoru said.

Senior Sao Tome officials last week said the announcement could be delayed by up to two months after Arlindo Carvalho resigned as natural resources ministry amid corruption allegations. The resignation came days after president Fradique de Menezes sacked oil adviser Patrice Trovoada, son of the Miguel Trovoada, a former head of state. Trovoada's Independent Democratic Action political party has nominated to prime minister Damiao Vaz d'Almeida both a geologist and a lawyer as a replacement for Carvalho.

Trovoada, whose party retains control of the petroleum and trade and industry sector under the nation's coalition government and who remains a powerful figure despite his
unexpected dismissal, last week told Platts that Sao Tomean authorities were hoping to get the process for awarding the blocks back on track but both legal and transparency issues had to be dealt with first. Under the terms of a treaty signed in 2002, Nigeria, which is already Africa's largest oil producer, will take 60% of all oil and gas revenues. Sao Tome will take 40%.

This story was first published in Platts real-time news and market reporting
service Global Alert - http://www.globalalert.platts.com

Here's the latest English-language report from Lusa, the Portuguese news agency that lately has been bashing ERHC Energy, but doesn't do so today:

24-05-2005 13:44:00.
Fonte LUSA.
Notícia SIR-7027360
Temas:

Sao Tome: Ministers in Abuja for talks on delayed oil-block allocation

Sao Tome, May 24 (Lusa) - A ministerial delegation leave Sao Tome and Principe Tuesday for two-way talks in Nigeria on the delayed process to allocate offshore oil exploration rights in the two countries` Joint Development Zone.

Natural Resources Minister Arlindo Carvalho told Lusa that a meeting of the Joint Ministerial Council has been requested by Sao Tome to review the awards of exploration rights to five offshore oil blocks in the delayed 2004 licensing round.

The talks in Nigeria will start later Tuesday, he added.

Carvalho, heading the Sao Tomean delegation, said he was traveling to Abuja with Foreign Minister Ovidio Pequeno, Defense Minister Oscar Sousa and Planning Minister Adelino Castelo David, in addition to an adviser of President Fradique de Menezes.

"We will review the whole process to dispel all the controversies that have surfaced in Sao Tome", said Carvalho, referring to a row that has erupted in the archipelago in recent weeks on how to allocate the handful of offshore oil blocks.

Last week Carvalho said he was exiting Sao Tome's government due to allegations of irregularities in the overdue block allocation, but President Menezes rejected his resignation Monday, saying the minister had "valuable knowledge" in the process.

Nigerian President Olusegun Obasanjo visited Sao Tome last weekend and expressed his displeasure at the hold ups in the awards of the offshore blocks.

Allegations of private oil interests of a number of senior Sao Tome officials emerged about a month ago and have already forced Menezes to sack his personal oil adviser and another presidential counselor.

Menezes also agreed to take a back seat on the country+s National Petroleum Council.

RCN/CJB.

Lusa

www.lusa.pt

Carlos Gomes Tells 'ThisDay' He Expects Sao Tome To Approve Awards; Hints 'Oil Majors' Are Behind The Crisis; 'Punch': Awards This Week

Showing no signs of regret for the JDA's choice of bid winners in the Nigeria-Sao Tome and Principe Joint Development Authority's second licensing around, JDA chairman Carlos Gomes told ThisDay Online Monday that he expects Sao Tome to approve those choices when the JDA's Joint Ministerial Council meets again today in Abuja.

Another article, posted by Ruby1100 from the Nigerian daily Punch, says the JMC is expected to ratify the original awards before the end of the week (see below).

Gomes suggested that some disappointed "oil majors," such as ExxonMobil, were behind the crisis manufactured in Sao Tome:

"Although no local companies showed interest from Sao Tome, I think some people there may be protesting on behalf of some oil majors which they have interest in," he added.

Gomes talked Monday to the paper's Mike Oduniyi, a veteran reporter on the oil industry.

Oduniyi also reveals that Nigerian businessman Mike Adenuga's Conoil may be the winner of a 20 percent chunk of Block 4, where he would be partnered with Noble Energy and ERHC Energy, and possibly with Equator Exploration.

Protests Stall Award of Oil Blocks
by Mike Oduniyi
05.24.2005

The hitherto smooth administration of the Joint Development Zone (JDZ) of the Gulf of Guinea by Nigeria and Sao Tome and Principe has run into stormy waters as the two countries are now sharply divided over the award of oil acreages in the region to companies that participated in the 2004 licensing round.

At the heart of the disagreement is a loud protest by Sao Tome against the recommendations of the Joint Development Authority (JDA), the body administering the Zone, to allocate various equity interests in the five oil blocks on offer to Nigerian indigenous companies, including Conoil owned by Dr. Mike Adenuga.

THISDAY checks revealed that following the Sao Tomean protest, President Olusegun Obasanjo, who visited the tiny Archipelago Island last Friday, warned that the country was "politicking with purely technical matters."

The Joint Ministerial Council (JMC), the highest ruling organ in the Zone made up of 12 members drawn from the two countries, had met in Abuja late last month to deliberate on the recommendations of the JDA on the structure and composition of companies in the blocks namely 02, 03, 04, 05 and 06.

It was gathered that while Obasanjo had already approved the recommendations as presented by Nigeria's representatives on the JMC, his Sao Tomean counterpart, Fradique de Menezes, has withheld assent. This, THISDAY gathered, followed objections raised by that country's National Petroleum Agency, citing the preponderance of Nigerian indigenous companies holding "uncomfortable" equities in the oil blocks.

According to the complaint by the Sao Tome petroleum agency, most of the Nigerian local firms are connected in one way or the other to the Nigerian Presidency.

The agency cited for instance, allocation of 10 percent equity in Block 02 to A&Hartman, and 5 percent equity in block 04 to a company named Godsonic, both allegedly linked to Chief Tony Anenih. There are also allocations of 5 percent in Block 02 to Momo Oil and Gas as well as 10 percent shares in Block 03 to Equinox Oil and Gas, both linked to Mohammed Asibelua.

Adenuga's Conoil got 20 percent equity in Block 04 for which the company had submitted bids offering to pay $150 million signature bonus, when tenders were called late last year.

According to the position of the oil block allocation as presented by Nigeria's representatives in the JMC as at April 26, 2005, US-based Environmental Remedial Holding Company (ERHC), where Nigerian businessman, Emeka Offor's Chrome Energy holds 50 percent clinched 70 percent equity in the most promising Block 04 in partnership with Noble Oil Company.

ERHC, which exercised its preferential rights in the JDZ, used the rights to clinch equity interests in three of the five blocks put on offer. The other firm also with preferential rights in the Zone, ExxonMobil, declined last month to exercise its right.

Opposition from Sao Tome to this arrangement has been linked to the recent crisis that has rocked the country's government. First, President Menezes sacked his Oil Adviser, Patrice Trovoada, while the country's Minister of Natural Resources Arlindo Carvalho tendered his resignation last week, citing pressure over delays in awarding the JDZ Blocks.

Speaking in an exclusive interview on the matter, the Deputy Director Monitoring and Inspection of the JDA, Dr. Carlos Gomes, yesterday dismissed the claims by Sao Tome, adding that the Authority had followed clearly the rules laid down for guiding the 2004 Licensing Round of the JDZ.

Gomes listed the criteria, including:

• Companies with good, sound and solid foundation in oil exploration and production
  
• Need to diversify operatorship of the oil blocks, whereby no one company because of its strength (financial and technical) controls more than two blocks
  
• Offering opportunities to independent players, as against the presence of dominant oil majors, and
  
• Offering opportunities to local companies to own equities in the oil blocks.
  According to the JDA Chairman, while Nigerian indigenous companies participated in the bidding, none came from Sao Tome.

"The criteria are there, clearly stated, which we followed religiously. We have guidelines, which we published and we have followed. Any party in doubt can check them out," said Gomes.

"Although no local companies showed interest from Sao Tome, I think some people there may be protesting on behalf of some oil majors which they have interest in," he added.

The JMC meets again today in Abuja. According to Gomes, he expects Sao Tome to have approved the recommendation. "If they have observations they must state on what technical grounds. But if it has to do with political matters, then that is beyond us. The two Heads of State will have to deal with that."

The JDA was originally scheduled to announce winners of the five oil blocks namely 02, 03, 04, 05 and 06 last January. This was later postponed to April 2005 to enable the JDA conclude screening of the bids as well as allow ExxonMobil exercise its rights.

Under the JDZ arrangement, Nigeria's share of the reserves in the region put at 10 billion barrels of crude is 60 per cent and the remaining share of 40 per cent is held by Sao Tome and Principe.

Here is the article (with emphasis added) posted by Ruby11oo, a trusted poster, from Punch:

The Punch, Tuesday May 24, 2005

Nigeria, Sao Tome ministers meet on oil blocks winners
Michael Faloseyi

ABUJA -- The Joint Ministerial Council of the Nigeria, Sao Tome and Principe will reconvene in Abuja on Tuesday (today) to ratify the winners in the five oil blocks it placed on offer in the joint development zone.

Our source in the Joint Development Authority confirmed the meeting in Abuja on Tuesday when he said that the major agenda of the meeting would be clearing outstanding issues on the bids for the oil blocks.

While declining comments on the possible announcement of winners in the bids received for the five oil blocks that were placed on offer in December, the source said that the meeting would also address any other matter.

Media reports indicated last week that President Olusegun Obasanjo and his Sao Tome counterpart, Mr. Fradique des Menezes, have ratified the recommendations of the technical committee on winners in the bids.

It is, therefore, expected that the JMC will this week announced winners in the bid exercise at the end of its meeting.

The highest offer of $175 million was received on block four from ECL, one of the indigenous oil companies that participated in the bid exercise.

Another indigenous oil company, Conoil Producing Limited, placed $150 million on the same oil block that was the toast of most bidders.

Analysis of the bid received indicated that $135million from Vintage Oil and Gas was the highest bid placed on block two, while $41million by Energy Equity Resources was the highest received on block three.

A joint bid of $37million from ICC-OEOC was the highest bid placed on block five, while $45million was the only bid received on block six.

Meanwhile, the handling of the bids had sparked off reactions in the international community, a development that led to the resignation of three ministers in Sao Tome and Principe.