ERHC Energy Inc (ERHE)

[chcr]

ERHC: UPSTREAM NEWS

Sao Tome backs off from ERHC

23:08 GMT

THE Sao Tome legislature voted this week against challenging the right of US minnow Environmental Remediation Holding Corporation (ERHC) to exercise priority privileges to acreage equity in the deep waters of the Joint Development Zone managed with neighbouring Nigeria, writes Barry Morgan

In addition to bidding six blocks, ERHC has a right to a specified percentage without paying any signature bonus, attracting flak from some Sao Tomean parliamentarians who are demanding greater transparency.

The latest move paves the way for a smooth awards process for three blocks, with the remaining six licences offered under a recent round saved for allocation later this year. The Abuja-based Joint Development Authority will meet in the Nigerian capital next week to finalise an announcement, sources said.

ERHC, controlled by Nigeria's Chrome Energy, has a right to 30% of JDZ block-2 in which it is bidding jointly with Pioneer Natural Resources. It can claim 25% of block-4 and also registered interest in taking up 20% of block-6.

Few bid for block-6 but present delays in releasing documentation are understood to relate to protracted preparations to bring the block back into the initial awards after pressure was exerted by some in Sao Tome to postpone the award of this and several other blocks following lack of big company interest.

ERHC is said to be on track with Pioneer to jointly acquire operatorship of block-2 and it is understood documentation is complete.

The only other award in the JDZ has been block-1 to ChevronTexaco.
[e-mail]