ERHC Energy Inc (ERHE)

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8 February 2006
International Oil Daily
English
(c) 2006 Energy Intelligence Group Inc. All rights reserved.
US independent Pioneer Natural Resources said Tuesday it was pulling out of the Nigeria-Sao Tome Joint Development Authority's Blocks 2 and 3.

Pioneer was awarded a 65% stake in Block 2 in early June 2005, through a partnership with Devon Energy and Nigerian-owned, US-listed ERHC Energy.

Pioneer becomes the third US independent -- after Noble Energy and Devon -- to bow out of the much-delayed negotiation process for awards in the Joint Development Zone.

"It had to do with an inability to negotiate an acceptable agreement with our partner," a Pioneer spokeswoman told Reuters.

Devon, which was awarded 25% of Block 3, pulled out in July 2005, as did Noble Energy, which bid with ERHC for 60% and operatorship of Block 4. The two were said to have backed off at the prospect of carrying other small firms owned by influential Nigerians, amid concerns about the risk to their reputation.

ERHC, which has interests in Blocks 2, 3, 4, 5 and 6, is thought to be seeking to appoint China's Sinopec as Pioneer's replacement. ERHC declined to comment Tuesday.

Sao Tome officials have already opposed ERHC's decision to appoint Swiss Addax in Noble's place. They are thought to prefer Anadarko, the original high bidder, which ended up being pushed out of Block 4 into Block 3.