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Brazilian SEC Eyes OGX

Source: EXAME.

Rio – A OGX, the oil company owned by Eike Batista, will have to present all of the data on which its announcements of oil discovery and commerciality of exploration zones were based. A source told Broadcast, the real-time news agency of the Agência Estado, that the ANP — National Petroleum Agency — and CVM — securities and exchange commission — are looking very closely at all the discoveries announed by the company.

During a period of two and a half years (October 2009 to May 2010) OGX issued 55 announcements of new oil discoveries and declarations of commerciality (industry jargon signifying that an area of exploration will become a productive field). OGX shares rose sharply with each promissing announcement.

CVM has reportedly also asked  OGX to submit all the data that preceded the announcements. Since its creation in 2007, OGX has issued at least 105 official statements, half of them having to do with the discovery of evidece of petroleum.

Sought for comment, the CVM said it is investigating facts related to  OGX Petróleo e Gás Participações S/A and other companies in the same group, including companies recently covered by the media. ANP public relations points out that discovery notifications and requests for declarations of commerciality are created unilaterally by the company. After presenting a development plan for the oil field (a sort of transition between the exploratory phase and commercial production), the agency evaluates the plan and approves or refuses to approve the program.