Houston Chronicle article on ERHE 12/13/05 - (actually in today's harcopy newspaper, posted on their website yesterday)
Dec. 13, 2005, 11:56PM
Nigeria doubts São Tome on energy treaty
Island nation accused U.S. firm of bribery in deal
By TOM ASHBY
Reuters News Service
KUWAIT CITY - Nigeria's top oil official questioned on Tuesday the durability of a treaty with São Tome after the island nation called for a U.S. bribery probe into their joint award of oil licenses.
Nigeria and São Tome were due to sign five oil exploration contracts with foreign investors this week, but São Tome's attorney general said the agreements may be void because of indications that U.S.-based ERHC made improper payments to São Tome officials.
ERHC said it had no contact with officials during the licensing process.
Nigerian Minister of State for Petroleum Edmund Daukoru told Reuters that the report was based on poor information and a product of internal wrangling at the top of the São Tome government.
"My first reaction is just to reject the report in its entirety. They cannot come after the event to condemn because of their own internal politics," Daukoru said.
São Tome was struggling to cope with a system of government where the president is from one party and the prime minister from another, Daukoru said.
"I see a basic inability to weave a national consensus even on small issues. We are being made to appear as if we are forcing things on them."
São Tome entered into an agreement with ERHC many years ago giving the company preferential rights to equity in São Tome's oil acreage and valuable waivers in exchange for technical and financial services. The company was later acquired by a Nigerian businessman and floated on a U.S. stock market.
The deal acquired new significance when the tiny island nation signed a treaty with Nigeria in 2000 to put aside a border dispute and develop the offshore oil resources jointly.
ERHC was the biggest winner in May's joint exploration licensing, winning joint control of two blocks and a stake in three others.
Its share price has risen sharply amid hopes of a big find. Other companies involved in the licensing included Addax, Devon and The Woodlands-based Anadarko.
U.S. giant Chevron had previously won drilling rights on another joint block.
The report said that São Tome would lose $58.6 million because of waivers accorded to ERHC and that the rights given to the little-known company were so favorable that they might violate its law by alienating control of its natural resources.
It called for an investigation by the U.S. Securities and Exchange Commission into the alleged payments.
AI
