ERHC Energy Inc (ERHE)

[Nightdaytrader]

Sinopec does not have deep water exploration knowledge?

Interesting comment from article below: "Carlos Saturnino, a Sonangol director who headed the committee that assessed the bids, said Sinopec did not yet have the technical knowledge to lead exploration in deepwater fields."

ND9
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May 22, 2006, 7:42AM
Total, Petrobras Win Bids in Angola

© 2006 The Associated Press

LUANDA, Angola — Total SA of France and Brazil's Petrobras won contracts to lead international consortiums that will explore two offshore oil fields in Angola, authorities said Monday.

However, the largest stakes in the two blocs are to be held by SSI, a joint venture between Angolan state oil company Sonangol and China Petroleum & Chemical Corp., or Sinopec.

Carlos Saturnino, a Sonangol director who headed the committee that assessed the bids, said Sinopec did not yet have the technical knowledge to lead exploration in deepwater fields. Sinopec is Asia's largest refiner by capacity.

Total is to pay Angola $670 million and Petrobras $310 million in "signature bonuses" _ one-time cash payments made upon signing the contracts, Saturnino said.

Earlier this month, Italian energy company Eni SpA paid $902 million to secure a controlling stake in Bloc 15. Total and Petrobras are part of that bloc's consortium.

Angola only recently began declaring the amount paid in signature bonuses after pressure from human rights groups and foreign governments for greater transparency. Rights groups have charged that the money is diverted to a corrupt elite.

Total is to head exploration in a deepwater field called Bloc 17. As lead operator, it is to have a 30 percent stake in the field, with SSI taking 27.5 percent and Sonangol holding 20 percent, Saturnino said.

In Bloc 18, Petrobras was granted a 30 percent share, with SSI taking 40 percent and Sonangol 20 percent.

Smaller local companies took the remaining stakes.

Angola is the second-largest oil producer in sub-Saharan Africa after Nigeria. The Oil Ministry predicts Angola's daily output will rise to 2 million barrels a day by 2008.