I think the bidding on Block 4, with only two bidders, one who dropped out and the other who didn't have the financial resources, set the stage for Sao Tome to come to grips with the problem that block 4 is contested and the international caveat emptor is the most likely reason the bidding on the block didn't attract more attention.
By inviting Shell, STP changed the game, because if Shell accepted the invite, as appears to be the case, then only Shell would know the extent to which block 4, with source oil, is valuable.
If Shell really wants the block, it can offer substantial monetary resources to the Total/ERHC combo allowing them to release the block to Shell. Furthermore, Shell can also placate Kosmos with some monetary resources as well to get Kosmos to release the block also.
This was needed so that it could pave the way for Total to acquire ERHC in a buy out for its JDZ assets and the cash in its coffers from Shell.
It's like I said:
Step 1 - Shell pays ERHC cash for block 4 (also paying Kosmos and Total)
Step 2 - with several pennies a share in its coffers from Shell for block 4, ERHC might choose to pay a dividend as a cost effective means to draw in more investors versus an expensive road show or conference or getting off caveat emptor
Step 3 - Total does a buy out of ERHC and we get TTE shares. TOTAL does this to gain the JDZ assets and pick up the cash from Shell.
It's all nice and neat.
Kudos to STP for brokering this amazing private public partnership with Shell while respecting ERHC as the pioneer who got this all to happen in the first place. Bravo!
Krombacher
