French Total opens talks with South Sudan govt over White Nile deal

By Stephen Foley, The Independent

LONDON, Mar 24, 2005 — The French energy giant Total has opened talks with the government of South Sudan in the hope of getting the new authority to repudiate its oil deal with White Nile.

Headquarters of the oil group Total in the western Paris suburb of La Defense.

The cash shell controlled by the former England spin bowler Phil Edmonds had its shares suspended last month after excitement over the deal sent them soaring by 1,285 per cent in less than a week.

But the oil licence is now at the centre of a tussle between the central authorities in Sudan’s capital, Khartoum, and the newly formed government of the south. Both sides claim that a peace deal signed in January gives them the right to parcel out oil exploration licences.

Total agreed exploration rights with Khartoum in the Eighties and says it has paid an annual fee to maintain those rights throughout the civil war, which made production impossible. It re-signed the deal in December. A spokesman for the company said it had made contact with the South Sudan government to press its claim. He said: “We will be trying to impress upon them that this is not the way to start their period of international recognition, and that going against what has been signed is doing terrible damage to their image.”

Total cites clauses of the peace agreement regarding existing oil contracts, which state: “Contracts shall not be subject to re-negotiation.”

The deal also declares that the South Sudanese will share in the oil wealth from its territory, Mr Edmonds said. The nascent government set up a state-owned oil company called Nile Petroleum last summer, which claims to have taken legal possession of concessions in its territory. White Nile agreed a deal with Nile Petroleum last month. “Legally, there is no missing link,” the Total spokesman said yesterday. “The signature of contract by White Nile is just not valid. It is against contract rights and against the peace agreement.”

Total ruled out paying the South Sudanese for a licence for the disputed concession, but the opening of channels of communication with the new government raises the possibility of development-related deals that could encourage the South Sudanese to freeze out White Nile.

Mr Edmonds said he expected Total to attempt a deal with the new authorities but that he was “fully confident in the relationship with the South Sudan government”. White Nile was attempting to demonstrate that relationship yesterday by flying several British journalists to the region for meetings with the authority’s new ministers.