South Sudan to give UK While Nile stake in new oil firm

November 9, 2007 (JUBA, Sudan) — The semi-autonomous government of southern Sudan will give 55 percent of shares in a planned government-owned oil company to White Nile Plc , government officials said on Friday.

The company will take over the part of the block B consortium — mostly held by French Total — which was freed up when U.S. firm Marathon Oil Corp pulled out because of Washington’s sanctions on Sudan, the officials said.

“This company is to take over the 22.5 percent of the Marathon Company,” Legal Affairs Minister Michael Makuei said. “(Its shares) should be 55 percent owned by White Nile.”

The block has been the subject of a long-running dispute between the French oil giant and the British exploration company, which is 50 percent owned by the southern Sudanese government.

Total had taken the dispute to a British court.

The Sudanese National Petroleum Commission (NPC), which under a 2005 peace deal between northern and southern Sudan has the authority to assign oil deals, said in July White Nile had to leave block B.

The British firm had already begun exploratory work in one section of the concession.

Makuei, speaking to reporters after a meeting between White Nile and southern politicians, including Vice President Riek Machar, said the NPC had asked the south to choose a new company to complete block B’s consortium.

The NPC has the final say on the deal, but Makuei said its consent was a matter of formality. The NPC earlier decided to remove White Nile from Block B and had set up a committee to assess compensation for the company.

Machar said White Nile was an obvious partner for the southern government. “It is an established company … and it is much easier given that we own half,” he said

White Nile board member Edward Lino said that the company has invested around $75 million in the south.

“Of course we are waiting for Total and the rest of the shareholders (in the block’s consortium) to agree,” said Lino when asked if White Nile would re-start operations.

Members of the southern government pulled out of the central coalition government last month, saying the northern ruling party of Sudanese President Omar Hassan al-Bashir had not implemented key parts of the 2005 peace agreement.

The north-south war – separate from conflict in Sudan’s Darfur region – claimed the lives of some two million people, while four million were displaced from their homes.

(Reuters)