Total seeks south Sudan participation in oil exploration
March 12, 2007 (PARIS) — French oil company Total SA (TOT) is prepared to offer to the government of Southern Sudan (GoSS) a stake in its disputed exploration permit in an attempt to end the current stalemate with its rival the UK company White Nile ( WNK.LN), and start exploring activities.
“We will go to Sudan soon to submit new proposals to Southern Sudan government. We intend to give the GoSS an equivalent share of the national petroleum company (Sudapet) in the capital of the consortium” said Nicolas Brunet, the chairman of Total’s Sudan operations, in a meeting with Sudanese English language press in Paris last week.
Total’s partners in Block B project are the Marathon Oil Corp. (MRO) and Kuwait Petroleum Corp. (KPT.YY). Total has operating rights for the block with a 32.5 percent stake, Marathon Petroleum Sudan Ltd owning 32.5 percent, Kuwaiti Kufpec Sudan Ltd 25 percent and state-owned Sudapet 10 percent.
The proposal aims to secure Southern Sudan a share in order to avoid any opposition from its officials who could raise objections to the national partner’s share. GoSS can therefore be represented through Nilepet, their own petroleum company.
But the chairman of the White Nile oil company, the former England cricketer Phil Edmonds told The Times on Saturday March 10, that Total approach was “neocolonial” and typical of Big Oil’s way of dealing with smaller nations. “White Nile is not just our company, but the government of South Sudan’s company.” Edmonds added.
French company officials said that Total has the means and experience to explore oil and share the profit with the people of southern Sudan. Those officials told Sudanese journalists that Total will invest much of money to achieve this project. While a small start-up with limited financial capacities would surely face difficulties to assume such huge investment. They further said that the ultimate goal of Edmonds is to speculate with the future of southern Sudan and make money; because White Nile has no capacity to bring prosperity to the south.
The French oil giant explained to Sudanese journalists how they carry out their work in the host countries. According to their ethics Charter, the oil firm will participate in economic, social and educational development in close collaboration with the local communities. Also, Total strives to benefit local employment and contractors.
Several videos about total involvement in different countries in Africa, Asia and Latin America were displayed to illustrate the spirit of the company.
Regarding Total’s involvement in the protection of the environment and particularly huge quantities of water extracted from oil wells. Total officials demonstrated how they plan to re-inject the water back to avoid pollution and other hazards that could be provoked.
The question of water is one of the important challenges facing the Chinese GNPOC operating in Upper Nile. The poor treatment of production water is probably the most crucial environmental problem in Upper Nile now and is of great concern to the local population. GNPOC has opted for a bio-remediation solution, which could be acceptable, but has a limited capacity of 180,000 barrels per day, while excess water production for GNPOC is already around 650,000.
WHITE NILE ATTITUDE IS DILATORY
On the current dispute with the U.K. company White Nile Ltd. over the concession, Total’s legal advisor told Sudanese journalists that the British firm still refuses to disclose all contractual documentation (Concession agreement, Lock-in Agreement draft JV Agreement etc..). He further said that despite the confirmation by the Court of Appeal of the decision of the High Court on January 31, 2007, The White Nile lodged a permission of appeal to House of Lords on February28.
Reliable sources in Southern Sudan told the Sudan Tribune that the White Nile has no contract with the GoSS but with the SPLM Civil authority at that time. “This is why few people in southern Sudan know the details of this enigmatic contract.” the source said. “Many officials in the GoSS are wondering why they make a pet on this small start-up because this issue makes a very bad reputation for southern Sudan and would discourage foreign investors” he further added.
According to an article published in June 2006 by the Wall Street Journal, U.S. government officials are concerned that the White Nile deal could set a bad precedent for Southern Sudan. They allege that the British company disbursed “bonus payments” to government officials to secure the concession. But the chairman of the White Nile former England cricketer Phil Edmonds denies the allegations.
The French company set foot in Sudan in 1980 when it was awarded a permit to explore the vast Block B. Total shot 1,600 kilometers of seismic survey but had to leave the country in 1984 because of the outbreak of violence between the north and the Sudanese People’s Liberation Army of the south.
Total exercised clauses in the contract equivalent to force majeure to call for a “stoppage period.” Year after year, the French company paid a small fee to the Khartoum government to perpetuate its rights on Block B. Total said its decision to suspend work at that time because it chose not to side with any part in the conflict.
However, in early 2004, when peace was in sight, together with its partners in Block B, Total signed an addendum to the original contract in December 2004 to bring it in line with modern-day economics.
(ST)