UK White Nile forced to disclose oil rights documents in Sudan
By Michael Jivkov
Feb 19, 2007 (LONDON) — White Nile, the AIM-listed oil explorer chaired by the former England cricketer Phil Edmonds, has suffered a court setback in its battle with the French giant Total over a key oil concession in Sudan.
Although White Nile is yet to tell the City about the setback, Small Talk has learnt that on 31 January the group was ordered by the Court of Appeal to disclose documents which confirm its rights over Block Ba in the south of the African country.
The AIM company has long resisted such a move, but following the judgment it has no choice other than to release the documents as the court has refused it permission for any further appeals. Small Talk has also learnt that White Nile has been ordered to contribute to Total’s legal costs.
The dispute centres on White Nile’s rights over 60 per cent of Block Ba, a 67,000-square-kilometre site in southern Sudan that is the company’s key asset. In February 2005, it secured the concession from the government of southern Sudan. However, Total has claimed all along that this infringes on exploration rights it won from the country’s central government in Khartoum in 1980. The two companies have been locked in a court battle for more than a year,.
But, it is hard to understand why White Nile has been so determined not to hand over the documents. After all, it is these very documents that prove its rights to Block Ba. By disclosing them, it could have saved itself a lot of time, effort and legal cost.
In its judgment, the Court of Appeal noted White Nile had never given any convincing reasons as to why the documents should not be handed over. When contacted by Small Talk, a spokesman for the company said: “White Nile does not believe that the British High Court is an appropriate forum to determine the rights to oil resources in southern Sudan.” He added that the company is convinced it has full title over Block Ba.
Small Talk has always taken the view White Nile is one of the riskiest investments on AIM. This latest episode only goes to support our view. As do recent comments from Sudan’s oil minister. In December, Awad Ahmed al-Jaz described White Nile’s exploration licence in the south of the country as “illegal”. He argued that the French oil major was legally entitled to explore the area and that the Guernsey-registered company would have to leave the area.
Mr Ahmed al- Jaz is a representative of Sudan’s central government in Khartoum. White Nile’s licence was granted to it by an autonomous authority in the south of the country which fought a bitter war with the Khartoum government for 20 years until an uneasy peace was struck in January 2005.
But, despite the risks associated with White Nile’s venture, it has secured backing for a series of fund-raising measures since its flotation in early 2005. The most recent saw it raise pounds 12m in November. It plans to start drilling on the disputed site in the next six months.
(The Independent)