Sudan marks new oil concession in south

April 4, 2008 (JUBA) — Sudan’s National Petroleum Commission (NPC) has mapped out a new oil concession called block Ea, south Sudan’s Industry and Mining Minister John Luk said on Friday.

Luk said the decision on the exact location of the new block followed an application by the privately owned Spanish H Oil for the area through southern Sudanese authorities.

“We have adjusted (the) coordinates … allowing opportunities for others that might be interested in the block to make any offers,” Luk told Reuters.

The long slim block runs through four southern states along the western flank of four other already commissioned blocks in semi-autonomous south Sudan.

Luk could not immediately give the exact size of the block.

Next door is French Total’s largely unexplored block B and block C. Block C has been “disappointing” according to a European Coalition for Oil in Sudan (ECOS) report with five dry wells drilled between 2005-6.

And neighbouring block 5A is the site for the Thar Jath oilfield which produces 40,000 bpd of a heavy crude.

Southern officials said that the new Ea block is mostly on dry and flat land, easier to drill than some blocks which lie across south Sudan’s massive swamp.

Luk said H Oil, an international private group of oil and gas companies, had asked for the entire block.

“But the door is not closed for others,” he said, adding that the NPC was hoping to make a decision on H Oil’s application by next month’s meeting.

He did not say which other companies had expressed interest in the block already.

H Oil began negotiations for the area with southern rebels before a 2005 north-south peace deal that ended more than 20 years of conflict.

Fought over ethnicity and religion as well as oil, the war killed 2 million people.

Oil has played a major role in north-south relations since the peace deal. Southern politicians walked out of a coalition government in October saying Khartoum was failing to implement the deal and move troops out of southern oil areas.

Khartoum’s army has since vacated some key southern areas but Luk said the south suspected that Khartoum security personnel known as oil police are still operational around southern wells.

“(We) emphasised that security shall be maintained by the south Sudan police for the oil installations and the employees that are working there,” he said.

“We are sending the police now,” he added.

Under the peace deal which also gives the semi-autonomous southern government half of all oil revenues generated on its turf, southerners will be able to vote to secede from the north in 2011.

(Reuters)