OK a little bit more on the Road show from yesterday. Someone asked why the EEZ blocks were divided up in the ABC format and the answer was pretty straight forward. They said it was so ERHE and EEL wouldn't get all the best blocks. You can't own 100% of more than one block in A,B or C but can own less than 100% in as many blocks you want to bid on. So you can own 99% but not 100%. I'm a little surprised that EEL and ERHE went along with this because it was clearly to lessen ERHE's impact which was not allowed under their agreement. But maybe they didn't care because they got the blocks they wanted anyway or maybe they just went along so this could get this done. I think this would be a good question to ask at the AGM.
PGS pretty much ran this road show from a technical standpoint. STP really has no technical expertise and no real oil and gas experience either. They hired someone to do the technical work and they hired someone to write their PSC. As a result it seemed that many of the questions were not answered too well by STP. They were very gracious saying they would get back with an answer but it just showed STP's inexperience. Maybe this was partially due to the language barrier but I think it was largely due to the fact they are new at this. We shouldn't expect more from them than what they can do and I think we have already seen this on a number of occasions.
I can also confirm that negotiations have not started with either EEL or ERHE on the PSC for the EEZ blocks. As a matter of fact they haven't even contacted each other to set up a time for starting the negotiations. They said maybe they would do that next month.
The technical presentation for the EEZ covered all the types of plays that are currently being looked at. There were numerous plays mentioned but presalt was not one of them. That is not to say it is not a possibility but you would think that PGS would have at least mentioned it if it was a serious play. Some of the maps shown seemed to indicate the presalt play was more to the south, offshore of Gabon. Not to worry though, there were plenty of other plays and very good sands and traps identified throughout the region.
Throughout the presentation STP really tried to emphasize the fact that they intended for this licensing round and all oil and gas operations be carried out in an open and transparent manner and that no corruption would be tolerated. They seem to understand how vitally important it was to attract international investment whether it be in the form of oil and gas exploration or other business activities. And they also seemed to understand that living up to their international contracts is vitally important. PM Branco seemed to come off as being very humble and sincere. He also seemed appreciative of anyone willing to help his country. It was really a sharp contrast to the obnoxious, arrogant style our politicians seem to have today.
That's all that comes to mind at the moment. If I remember anything else of importance I'll pass it on.
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