White Nile oil company loses drilling rights in Sudan oil field

June 6, 2007 (KHARTOUM) — The British oil firm White Nile Ltd. (WNL.LN), has been kicked out of the disputed Block Ba in southern Sudan following a deal by the two major partners in the government of the national unity, Sudan Tribune has learned.

The French oil company Total SA (TOT) has assumed control of the the entire Block B after an agreement reached last week by the National Congress Party (NCP) and the Sudan People’s Liberation Movement (SPLM). Under the terms of the deal the president of the southern Sudan cancelled the contract signed with the WNL.

Sources confirmed to Sudan Tribune that Total has operating rights for the block with a 32.5 percent stake, as it was the case in the initial deal, Kuwaiti Kufpec Sudan Ltd 27.5 percent instead of 25% and state-owned Sudapet maintains its 10 percent, the southern Sudan government owned Nilepet 10%. The remaining 20% should be offered in a public bid.

However the US based Marathon Oil Corp. (MRO) which is Total’s partner in Block B, announced its withdrawal from the consortium as it is bound by US laws that prevent firms from doing business in Sudan.

The disputed Block Ba, is a 67,000-kilometer tract within Block B, an area the size of Greece thought to contain large reserves of oil.

The White Nile will be reimbursed for the costs incurred in its first oil contract. Last December, the Aim-listed oil explorer, has raised £12m to finance an appraisal drilling programme in Sudan.

Total suspended exploration activities in Sudan from 1985 to 2004 because the area where Block B is located was no longer secure. The French oil company is paying $1.5 million a year to the government of Sudan for the right to keep its non-producing Block.
While the White Nile was granted the rights by Sudan People’s Liberation Army two years ago. The SPLA then set up a semi-autonomous government in the south following a peace accord with Khartoum in early 2005.

This radical shift from the southern Sudan government indicates clearly that Salva Kiir disapproves the management of this important issue by deputy. Riek Machar was a firm supporter of the British firm.

At the end of last May , Salva Kiir ordered a freeze on oil exploration in Jonglei state. Kiir also formed a committee to investigate the controversial White Nile oil company, headed by ex-England cricketer Phil Edmonds.

(ST)