Sudan oil body endorses Ascom & discusses Total concession

August 25, 2009 (KHARTOUM) — The National Petroleum Commission (NPC) in a meeting co-chaired by President Omer Hassan Al-Bashir and his first deputy Salva Kiir Mayadrit today approved the participation of Moldavian Ascom in block 5B.

The Commission also discussed the current situation of block B, after the freeze on oil exploration in Jonglei state of the controversial British oil explorer headed by ex-England cricketer Phil Edmonds, White Nile (WNK.LN).

Sudan’s oil minister, Al-Zubair Ahmed Al-Hassan, said today following the meeting that the NPC agreed to replace the Sudanese White Nile Petroleum Operating Company (WNPOC) by the Moldavian oil company Ascom in block 5B located in the Southern Muglad Basin.

The Moldavian Ascom obtained in the past a portion of block 5B, covering more than 20,000 square km, where it begun drilling in January 2008. The other part of the block had been operated by the consortium WNPOC led by Petronas.

The Indian ONGC and Sweden Lundin Petroleum decided to quit the consortium. The Indian firm decision was taken after southern Sudan government allowed the Moldovan firm to prospect in the acreage in contravention with a resolution by the National Petroleum Commission.

While the Lundin announced in February 2009 the selling of its investments in the region following its negative drilling results in southern Sudan.

The partners in Block 5B were Petronas Carigali White Nile (5B) Ltd; (39%), Lundin Petroleum (24.5%), ONGC Videsh Ltd (23.5%) and Sudapet Ltd (13%). Furthermore, the partnership had accepted the recommendation of the National Petroleum Commission to assign a 10 percent share to the National Oil Company of Southern Sudan to be allocated on a “pro rata” basis from each of the partner’s share.

The minister also said the Commission has mapped out a new oil concession called block EA. The long slim block runs through four southern states along the western flank of four other already commissioned blocks in southern Sudan.

The NPC, according to the minister, set up a joint committee of the Federal Government and the Government of the South to negotiate with two Spanish firms that stated their desire to drill in the block and to consider financial and technical abilities, as well as attracting other new offers.

With regard to the long time disputed block B between the British WNK.LN and the French Total, Al-Hassan said the meeting adopted the outcome of a commission on the evaluation of WNK assets. He further said that it was decided that Total would compensate its British past rival.

The British White Oil Company had started operating in the disputed 67,000 square km concession of block B on April 19, 2007; but the President of the semi-autonomous region Salva Kiir ordered to freeze its activities in May of the same year and the NPC decided to exclude the British firm.

At the time Sudan oil commission also decided on an adequate and fair compensation for the White Nile in return for any achievement in the fields, but it didn’t give any indication on who will pay the indemnities.

According to a new agreement between the Sudanese parties, 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.

Today’s meeting acknowledged the need for a third partner company to replace the US Marathon, said the minister.

Marathon Oil Corp.’s (MRO), which had been unable to keep its 32.5% interest in the block because Sudan is under U.S. sanctions, sold the stake to Total in March 2008.

Mubadala Development Company, a wholly owned investment vehicle of the Government of the Emirate of Abu Dhabi,.was seen as strongest candidate to enter Block B, but the first Vice-President didn’t yet give his approval.

(ST)