Red (#152190),Homeport (#152203),Spec(#152207)& Petermantx (#152208),
Red (#152190),
...I'm a little confused what your final thoughts on the delineation. Are you thinking STP will try to set aside the preferrable rights of EEL and ERHE through their efforts of the STP Petroleum Law, thus usurping EEL/ERHE's rights ?
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No Red, you misunderstood. More correctly, you missed the subtlety of what I was trying to convey.
I did not say STP would try to “set aside” (and thus usurp) EEL/ERHE rights. What I said is that by introducing a direct allocation clause in the draft Petroleum Bill, STP would create a situation which “de facto” supercede previous agreements. I did not say “de jure” supercede (which I agree, would lead to all sorts of legal entanglements for STP).
Now why is this important? Because all the ERHE/EEL rights agreements implicitly presuppose that these rights are exercisable on what each company presumes are the best blocks (hydrocarbon wise) available to it. EEL gets to pick two of the reserved blocks (the third goes to STP), ERHE gets to pick two of all the remaining, non- reserved, blocks.
As you are aware, it has been commonplace on this BB to describe the arrangement (leaving aside for the moment the two 15%options each company possesses) as EEL get to choose the first and second best blocks, ERHE picks up the fourth and fifth.
But what if STP first directly, allocates the best three blocks respectively to Petrobras, Sonangol and Galp, then puts on three more as “reserved” blocks(as it is entitled). It then asks EEL and ERHE to make their choices…..thus respecting the Agreements and convenants. Only now EEL would be entitled to pick the fourth and fifth best block, ERHE the sixth and seventh.
That is what I am afraid of. Essential (de facto) but not legal (de jure) usurpation of what we though as rights to the EEZ’s “best” blocks. The rights remain intact. Just the best blocks are taken away.
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Homeport (#152203),
… there's been far too little discussion here of the possible implications for us of an eventual new STP oil law and 4-way Lusophone consortium.
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Agree completely. Although some people have discussed it here before, and I am sure many have thought about it privately. Your unique contributions have of course made it possible at all.
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Spec(#152207),
"...proposed Oil Law that would supercede all prior agreements."...
STP has always had the first three picks and ERHC has always had picks four and five.
STP's and ERHC's agreement is prevented from being modified by future law changes of STP by the agreement itself.
DO NOT let anybody bullchit you on that now or in the future!
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Spec- You misquote me…..big time. I said “would DE FACTO supercede…”. Please read the response to Red….and do be so hasty.I do not “bullchit” anybody.
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Petermantx (#152208),
Like you state (Spec), I had always thought STP had the first few picks in the EEZ and then came ERHC followed by EEL (Peter N. was very emphatic at the 08 SHM regarding ERHC rights preceding EEL rights)
SPP has been a good EEL source and he seems just as certain that EEL has the first picks in the EEZ. Certainly hope he is mistaken. But nevertheless, there has to be at least 7 extremely good blocks in the EEZ from which to choose.
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No Pete. The picks are like Spec describes and I elucidate in Red’s response. I don’t now what PN was referring to exactly, but the precedence is that EEL gets to choose between the three STP reserved blocks, ERHE gets to chose amongst the others. And I would assume you would acknowledge that a state has precedence over a private company in the pickings …...
There is (perhaps) a question about how the 15% options can be exercised, but if any one company has a problem, they must ask the STP who is the other party in all our respective agreements to sort it out. Their problem, not ours.
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Regards,
Spp119
AI
