Total quits South Sudan after failing to strike deal on oil exploration
July 26, 2018 (JUBA) – South Sudan government and the French oil company Total SA (TOT) have ended without agreement negotiations for two blocks in Jonglei region, as the oil minister pledged to attract new investors.
The formerly known as Block B, and held by Total in line with an agreement with the government of Sudan, was split into three parts in 2012.
In 2013, the two parties started discussions on the Block 1 and Block 2. In 2017, the Ministry of Petroleum awarded the third Block 3 to the Nigerian oil company, Oranto Petroleum.
The South Sudanese oil minister said the French oil firm wanted to launch long exploration works before to sign an Exploration and Production Sharing Agreement (EPSA) with the government.
“The Ministry of Petroleum of South Sudan has stated its willingness to proceed with the signing of a draft EPSA, but Total has insisted on an extremely long exploration period and on economic terms that are not viable for the government,” said Ezekiel Lol Gatkuoth
Gatkuoth regretted that Total, after this long period of talks, has been unable to agree on economic terms and a timeline that works for the country
“Without this cornerstone in place, the Ministry of Petroleum cannot continue to negotiate an EPSA with Total. We are keen to discuss the exploration of Blocks B1 and B2 with new parties,” he added.
Already in March 2017, Minister Gatkuoth threatened to terminate contracts awarded to Total by the end of April of the same year.
Since its independence, South Sudan relies on oil as the main source of cash. Also, the country seeks to increase its production to have the needed money for development and infrastructure project after the end of a 5-year civil war.
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 kilometres 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.
After the Comprehensive Peace Agreement in 2005, Total had to struggle for several years to keep its rights in the Block B after the attribution of the same bloc to the U.K. company White Nile Ltd by South Sudanese officials.
(ST)