To Kingpindg:
Your questions make sense, and I’ll address each aspect of the speculation and strategic elements in play based on publicly available information and logical inferences.
1. Why Would São Tomé Broker a Deal for ERHC in Block 4?
São Tomé’s decision to broker a deal for ERHC in Block 4 could hinge on the value ERHC’s network and regional ties bring to the table. ERHC’s presence and history in the JDZ and EEZ regions have allowed it to cultivate influential partnerships. A brokered arrangement, where São Tomé facilitates rather than repossesses, allows ERHC to remain an active player and leverage its partnerships to help secure additional resources in Gabon, Uganda, or other high-potential African blocks.
Moreover, it’s a logical way to keep ERHC incentivized to enhance its value in the region, especially as it continues to operate under an international caveat emptor and non-disclosure conditions, which we know require strategic silence.
2. TGS and the “Source Oil” Concept:
A year-old article by TGS, shared on LinkedIn, referenced the Jaca-1 discovery in São Tomé’s Block 6, revealing significant petroleum potential with geological characteristics mirroring those offshore in Gabon. This discovery in Block 6 positions the entire region, including Block 4, as an area rich in “source oil,” attracting the interest of companies like Shell. The TGS data confirms the region’s potential, suggesting that strategic, cross-border development could maximize the area’s value.
3. Gabon’s Blocks and Shell’s Strategic Approach:
If Shell pursues assets in both the JDZ and EEZ, including São Tomé’s Block 4, it stands to benefit from exploring and developing assets in neighboring Gabon, like Blocks EG-28, BCD, Agali, A3, and CB3. Acquiring assets in Gabon adjacent to the JDZ and EEZ allows Shell to leverage infrastructure synergies, spreading costs over multiple developments. With both Block 4 and Gabon blocks under consideration, ERHC’s strategic role and regional network could be instrumental, positioning them as a valuable partner.
4. Contingency in the Shell-ERHC Deal Structure:
Given these regional synergies, a deal between Shell and ERHC may hinge on ERHC securing additional African assets to complement Block 4. If ERHC succeeds in acquiring blocks in Gabon or other strategic locations, Shell’s valuation of ERHC would rise significantly. The final payout for Block 4 could be structured on a tiered basis: a baseline valuation with additional payouts if ERHC’s network and influence secure adjacent African blocks Shell is interested in developing.
5. ERHC’s Long-Term Positioning Across Africa:
Ntephe’s engagements, such as his discussions with Uganda’s Energy Minister, suggest that ERHC is expanding its footprint beyond the Gulf of Guinea, actively engaging with high-level African stakeholders. ERHC’s extensive network could offer Shell a comprehensive entry point into diverse African oil assets, ultimately streamlining Shell’s access to multiple regions through one established partner.
Summary:
The preponderance of evidence supports a scenario where São Tomé’s actions are part of a brokered solution, rather than a repossession of Block 4. The apparent lack of litigation from ERHC in London Arbitration Court further supports the idea that São Tomé brokered the deal rather than unilaterally taking control. Additionally, ERHC’s relationship with Shell could be structured to provide significant returns if contingent conditions, like acquiring Gabon assets, are met.
The pieces align to suggest that ERHC isn’t merely waiting for something to happen but is actively maneuvering in the African oil landscape, positioning itself to capitalize on the Gulf of Guinea’s vast resources, supported by one of the largest players in the industry.
Krombacher
AI
