PGS, EEL And Cherwayko Get Bad Press On Sao Tome Deals
(FROM JOE SHEA'S WEB SITE. R.M.)
An article posted on the market-watching site ADVFN (we have had an account there for three years - just $6.99 a month - and highly recommend) spells out in a lot of detail the contracts with Sao Tome & Principe, the tiny island nation that may hold the key to untold oil riches in the near future, and where ERHC Energy's rights had long been a political football. It may be the first time that someone other than ERHC came under fire its dealings with the country's top officials.
The article was produced by a human rights organization called Norwatch, which usually is focused on wrongdoing involving Norwegian companies. The issue in this case is the chain of custody of PGS copntracts negotiated with the island. Norwatch says Wade Cherwayko, a onetime associate of former ERHC Energy chair Sir Emeka Offor and now the CEO of Equator Exploration (EEL), which prospered mightily on the London AIM exchange when it first started trading there in 2004.
Norwatch says that Cherwayko negotiated the agreements on 3D resource mapping that is Norwegian-owned Petroleum-Gas Services' main business, and payment in the form of three blocks of their choice and 10 percent of tall future signature bonuses the nation would receive. Cherwayko says he did not negotiate the contracts; a former oil minister who negotiated the contracts for Sao Tome says Cherwayko did.
That wildly generous payment was substantially revised, but EEL still ended up with two blocks to be chosen just ahead of ERHC Energy's choices in the country's Exclusive Economic Zone - and 10 percent of the first signature bonus. That meant Sao Tome realized about $2 million, but EEL took its contracts to the stock markets, where investors bet $100 million on them, money Cherwayko can probably take home.
All of this has occurred before a single drop of oil has been produced.
The big question, though, is whether Sao Tome & Principe can ultimately renege on its various contracts, which iobservers say are marred by both internal corruption and inexperience.
Here is the Norwatch article from ADVFN's EEL board:
(YOU CAN READ ARTICLE ON JOE'S WEB SITE. R.M.)
