Total, White Nile claim rights over Sudan oil block
June 14, 2007 (LONDON) — Total SA (TOT) and White Nile Ltd. (WNL.LN) Thursday both claimed victory after a two years dispute over who can develop a key Sudan oil concession.
The French company said its rights had been confirmed by the government and its U.K. rival said it would participate in the consortium that develops the acreage. In a statement, the U.K.’s White Nile said that it had been included in a consortium to develop the concession.
But a spokesman for French oil major Total immediately said “it is not our wish” to partner with White Nile.
White Nile’s shares fell under 100 pence in mid-afternoon trade as the news started to surface but recovered to 119p, still down 6.75p, or 5.4%, at market close. Total’s shares closed up 3.6%, or EUR2.03, at EUR58.
White Nile surfaced on the radar screen of the oil industry in February 2005 when the London listed, tiny company announced an agreement with the autonomous government of South Sudan to acquire a 60% stake in Block Ba in the Muglad basin.
Block Ba covers a 67,500 square kilometers area and is part of the larger Block B, a 110,000 square kilometers block about 5% of Sudan’s area.
At the time, the deal was denounced by Sudan’s central government and by Total which, in December 2004, had renewed a contract on the acreage it abandoned in the 1980s because of the civil war. Total later launched a legal action in London seeking disclosures on the White Nile deal.
The controversy had come to symbolize the rising uncertainty faced by oil majors in volatile parts of the world.
The decision to settle the dispute had been put in the hands of a joint commission between South Sudan and the central government. But the While Nile announcement suggests a compromise may have been reached.
White Nile said it “has been informed that it is to be included in a consortium that will explore and develop the enlarged Block B, which will include Block Ba” it was awarded by South Sudan in 2005. Block B also includes Blocks Bb and Bc.
White Nile said “it is understood that the divisions in the consortium will be as follows: Total 35%; White Nile 25%; the Kuwait Foreign Petroleum Exploration Co., 20%; SudaPet 10%; and NilePet 10%; the latter two being the national oil companies of Northern and Southern Sudan respectively.”
The Kuwaiti company and Sudapet were already shareholders in Block B under the Total concession.
However, the Total spokesman said the company had received an oral communication confirming its rights on the block but said a “partnership with White Nile was never a question.”
(Dow Jones)