South Sudan deal with UK oil firm valid, SPLM official says

By George Obulutsa

NAIROBI, June 27 (Reuters) – A disputed deal between south Sudan’s former rebels and UK oil explorer White Nile is valid, and French oil giant Total’s concession there has expired, a top former rebel official said on Monday.

Total has disputed the award of the concession to White Nile, as has the Sudanese government in Khartoum.

Khartoum has said a landmark peace deal finalised in January between it and the former rebel Sudan People’s Liberation Movement (SPLM), stipulates the energy ministry and national petroleum commission are the only bodies that can award concessions.

The former rebels are in the process of being integrated into the national Sudanese government and will eventually administer south Sudan.

Riak Machar, the SPLM’s deputy chairman, said that Total’s concession had expired in 2000, clearing the way for British oil firm White Nile to sign a new deal in August 2004.

“In 1980, Total Oil Company … was given rights for a block. When the war erupted in 1983, they left. Their concession was for 20 years. It expired,” Machar told a news conference in Nairobi.

“Total tried to renew their contract in December (2004), but we had already given the concession out by August of last year. We believe it is legal,” Machar said.

Oil was a factor in the 21-year war pitting the mainly Christian and animist southerners against the northern Islamist government, and remains a source of friction.

White Nile is planning to acquire a stake in the 67,500 square km Block Ba in southern Sudan from the Nile Petroleum Corporation, which is owned by the SPLM, in exchange for a 50 percent stake in the company.

White Nile estimates that Block Ba “can be reasonably estimated to have potential oil-in-place figures of up to 5 million barrels.” The company plans to shift its base from the UK to Southern Sudan.

Southern Sudan, in need of billions of dollars to rebuild after what was Africa’s longest-running civil war that killed 2 million, is trying to attract investors to the region to tap its oil wealth and open other investment opportunities.

Sudan’s oil production, currently at 320,000 barrels per day, comes mainly from fields in the south, with Chinese, Malaysian and Indian firms the big investors.