ERHC offer causes shift in the deep
ERHC Energy is considering an offer by a US player to purchase a controlling stake in the company, which could alter the balance of corporate power in a recently concluded deep-water licensing round in the Gulf of Guinea, writes Barry Morgan.
US-listed ERHC Energy's chairman Emeka Offor, the Nigerian businessman who also heads up Nigerian independent Chrome Energy and is a major stakeholder in ERHC, convened a board meeting last week in which directors voted to "consider the offer on the table".
ERHC, which has acquired substantial acreage positions with partners Devon Energy, Pioneer Natural Resources and Noble Energy in the Joint Development Zone (JDZ) organised by Sao Tome&Principe and Nigeria, has similar ambitions in the Exclusive Economic Zone (EEZ).
Contact has been established with a mid-sized US company angling to take control of the company.
Despite a possible name change, it is understood ERHC's ambitions to become a regional player will survive any possible deal and that Nigerian interests will retain some of the equity as the JDZ and EEZ deals go forward.
Offor's stake has been reduced in recent weeks and is now believed to be around the 43% mark. Offor, along with other Nigerian shareholders, could collectively decide to maintain a controlling interest, but indications are the temptation to sell is gaining ground among major shareholders, most of whom are private US investors.
It is believed Devon or Pioneer both could be first in line if an ERHC stock sale is considered, given their existing partnership in the JDZ.
The Joint Development Authority this week reiterated its intent to sign PSCs before September for all five blocks, although indications are it would wish to get blocks 2, 3 and 4 to signature before then.
Signs are that technical difficulties over Block 5 may take some time to resolve and officials are loath to let signatures slip on the other licences.
Farther south, Sao Tome&Principe had aimed before the end of the year to license acreage falling under its part of the EEZ, but growing political tensions amid calls for early polls may cause delay.
Moreover, several parties are poised to defend mutually contradictory preferential rights claims in the EEZ.
Equator Exploration and its subsidiary Aqua Exploration claim the sole right to acquire 100% working interest in two blocks of its choice in the EEZ.
This appears to fly in the face of claims by ERHC Energy to have a similar exclusive deal for a 100% stake in blocks 4 and 5 along with rights to a 15% stake in EEZ blocks 1, 2&3.
