White Nile to bolster Sudan claim
By Peter John and Andrew England, The Financial Times
LONDON/KHARTOUM, Mar 3, 2005 — White Nile, the small oil exploration company whose share price multiplied elevenfold after last month’s flotation, is poised to announce a substantial shift in ownership.
Andrew Groves, who set up White Nile with Phil Edmonds, the former England cricketer, hoped that the move would strengthen the claim on a block of potential oil-producing land in southern Sudan that is contested by an international oil major. “The mineral rights and oil rights belong to the people of the south and they have signed a deal with us,” said Mr Groves.
“Last August, the Sudanese People’s Liberation Movement (SPLM) transferred various oil concessions to Nile Petroleum Corp, an entity [that] is 100 per cent-owned by the [provisional regional] government in southern Sudan, and it is envisaged that NPC will end up with 50 per cent of White Nile,” he said.
Mr Groves argued that NPC’s claim on the oil asset pre-dates a renewed claim made by a consortium that includes Total of France and Marathon of the US.
He claims an earlier Total agreement was cancelled after a 1989 coup d’etat.
However, Total contests White Nile’s claim and investigations by the Financial Times in Sudan suggest that the Sudanese government knows nothing about White Nile.
Total of France, which owns a 32 per cent stake in the same block of land, said it was confident of its legal ownership. Total signed an agreement in 1980 along with Marathon of the US, Kufpec of Kuwait and Sudapet of Sudan for a 118,000 square kilometre area and re-signed the agreement in December last year.
Philippe Gateau, of Total, said: “For us, the legal position is very clear. This is a production-sharing contract we have had since 1980 and it is valid.”
Mr Awad Ahmed al-Jaz, the Sudanese energy minister, said: “The block is already taken by this group of companies. There is no way to come in and step in the shoes of the others. We don’t have any contact with this company [White Nile], they didn’t come to us”.
A spokesman for the Sundanese People’s Liberation Army, the southern Sudanese rebel movement which has recently negotiated a peace agreement after a long civil war, was unable to confirm a White Nile deal.
Southern rebels fought a 21-year civil war against northern governments, hindering efforts to exploit the country’s oil reserves but signed a peace deal on January 9. Under the accord, the government and rebels agreed to share southern Sudan’s wealth, including oil revenue, 50-50.
Part of the agreement stipulates a new petroleum commission that will include government and SPLA officials and will look at new proposals. However, all existing oil contracts are supposed to be honoured, according to officials.
Estimates suggest that Sudan has oil reserves of up to 3bn barrels, although proven reserves are about 631.5m barrels.