INTERVIEW-Total says White Nile has no any legal rights
PARIS, May 30, 2005 (Sudan Tribune) — Total’s Vice President for Public Affairs, Jean François Lassale, denied that White Nile Ltd (WNL.LN) has any “legal rights” in block B in southern Sudan.
The British White Nile said on Feb. 16 it had an agreement with the Sudanese People’s Liberation Movement (SPLM) for a 67,000 square kilometer stake in Block Ba. The block represents more than half the huge Block B claimed by a consortium consisting of Total SA (TOT), Marathon Oil (MRO) and Kuwait Petroleum Corp. (KPT.YY).
White Nile, whose chairman is former England cricketer Phil Edmonds, claims it acquired the oil concession in Block Ba from Nile Petroleum Corporation, which is owned by the Sudan People’s Liberation Movement (SPLM), in return for a 50 percent stake in the company. The Khartoum government disputes the SPLM’s right to award oil contracts.
To distinguish it self from White Nile Lassale indicated that Total project is based on a sustainable development approach, to promote training, health and education programmes in the South.
Regarding the timetable to start drilling oil from the block, Total’s Vice President for Public Affairs said it will start after the the demining, disarmament and demobilisation without giving any fixed date.
The following is the text of Lassale’s interview published by Sudanese newspapers Khartoum Monitor and Al-Ayam on May30, 2005; subheadings inserted editorially:
In the last few years, oil industry becomes the most attractive sector of the Sudanese economy. The rise of oil prices in the world market has raised also local & international concerns to this sector. The CPA signed in the 9th of January detailed the ways and means to manage this developing sector & how to share its revenues. But the first serious conflict which occurred between the Sudan government & SPLM/SPLA after the signing of the CPA happened to be over the rights on Block B in Southern Sudan Between Total which claim its old contract legally updated recently & White Nile claiming its rights through a contract signed with the future governors of Southern Sudan. To clarify Total’s position, we met in Paris Jean François Lassalle, Total’s Vice President for Public Affairs.
White Nile correspondence misleading and could constitute abuse
– Total’s return to Sudan coincided with the signature of the Comprehensive Peace Agreement, but also with the White Nile issue. Can you explain why both companies are claiming rights over the same block?
First of all, let me state clearly that Total was active in Sudan as long ago as 1980, but operations were suspended in 1985 for security reasons. When, early in 2004, peace negotiations between Khartoum and the SPLM/SPLA were underway with a positive outcome in view, Total and the [Sudanese] Ministry of Energy decided to re-examine the conditions under which Total could re-start its exploration activity as and when peace was assured. The 1980 EPSA was amended at the end of 2004 to reflect this agreement. This was not a new contract, but an update of our existing contract.
– And what about White Nile?
The situation of White Nile is completely different. In a circular dated Feb. 4th 2005, White Nile stated that its Directors “have identified several opportunities, but no firm commitment has been entered into.”
So, on February 4th, a date after the signature of the Comprehensive Peace Agreement, White Nile had no contract at all.
For a long period, White Nile was unable to produce any document that demonstrated the reality of its rights, and the correspondence they recently sent to the London Stock Exchange to restore the trading of their shares on AIM is, in our view, misleading and could constitute a market abuse.
Oil production requires high technical and financial capabilities
– Were you surprised by White Nile’s claim on part of Block B?
We certainly were, and for several reasons. First, the granting of exclusive mining rights on the same area to different title owners is quite exceptional in the world of oil. But more importantly, our updated contract was signed with the Government of Sudan and gave proper respect to the Peace Agreement, especially in relation to the Wealth Sharing Agreement. I think that the Peace Agreement should be respected by all parties involved in Sudan, and certainly we, at Total, will comply with it. In our view, White Nile has no legal rights.
Last but not least, it is obvious that an oil exploration and production project of this size requires high technical and financial capabilities.
– Unlike White Nile, Total claims to have the right competencies. What else can you bring to Sudan?
Total has had a long and successful record worldwide, and we have been active in Africa, since the middle of last century, in Angola, Gabon, Congo, Nigeria, Cameroon, as well as in Libya and Algeria. In fact, Total is the biggest oil producer in Africa.
As you know, Total is an international energy business based in France, and its shares are quoted on four Stock Exchanges, Paris, London, Brussels and New York.
I think it is important to recall that on Block B, Total is acting as the operator of a Joint Venture comprising oil companies from Europe, the United States (Marathon), the Middle-East (Kuwait Foreign Petroleum Expolration Co- Kufpec) and Africa (Sudapet) so this is a very international investment indeed!
Together these companies will take part in bringing investment and infrastructure to Sudan, and international companies will be sharing the development with local companies.
Our project is based on a sustainable development approach; it will promote training, education and health programmes, and will help to develop infrastructure and economic investment. We intend to work in full transparency and with due respect for the populations, their culture, and their environment. We will of course work in accordance with international business standards as well as with the principles of Human Rights just as we do everywhere in the world.
Production timetable
– What is your proposed timetable for resuming operations in Sudan ?
We understand the urgent need to start as soon as possible, but we want also to work in an efficient and professional manner to maximise the recovery of oil for the benefit of Sudan.
First of all, a secure environment is essential for oil operations. The signing of the Peace Agreement was a first step. Nevertheless, the demining, disarmament and demobilisation, as contemplated under UN auspices, is a priority.
Only then, will it be time to resume operations on site. Our base in Bor, which we visited in March, will probably be reactivated for seismic, and later for drilling operations. All operations will be conducted in full cooperation with the authorities of Southern Sudan.
We need to build a strong relationship with the local communities. Because we are in Sudan for the long term, we want to play our part in Sudan’s reconstruction. It takes time to develop understanding, but I can assure you that the people working on this project are already very enthusiastic and motivated and are looking forward to working in Sudan, with the South as well as with the North but in full compliance with local and international laws.