White Nile Executive: To help build south Sudan Kenya pipeline
By Benoit Faucon and Jackie Range
LONDON, Mar 3, 2005 (Dow Jones) — U.K.-based oil-exploration company White Nile Ltd. ( WNL.LN) intends to help South Sudan build its own pipeline, bypassing the north and providing it further regional clout, its development director and co-founder Andrew Groves told Dow Jones Newswires Thursday.
White Nile plans to tap markets with a bond to finance the project for an oil route to the Kenyan port of Mombassa, Groves said. A source familiar with the plan said the financing would be potentially worth $1.4 billion.
Last month, White Nile announced the signing of oil exploration rights with the future South Sudan government. The concession is being contested by both French oil major Total SA (TOT) – which was previously awarded the field – and Sudan’s central government, based in the northern capital of Khartoum.
The autonomous southern authority is a successor to the South Sudan’s People Liberation Movement, or SPLM, which has waged a two decades of war against the north’s central government before signing a peace treaty on Jan. 9.
A pipeline already routes Sudan’s oil from the south to the north’s Port Sudan on the Red Sea.
But Groves said a pipeline in the south would enable the SPLM to get more autonomy from the north, and even raise its regional influence.
“SPLM could become a dominant power in the region,” Groves said.
“Southern Ethiopia and Uganda would be opening up” to South Sudan’s oil exports, he explained.
In addition, the autonomous authority intends to build its own refinery, he said.
It’s unclear how a construction deal between White Nile and the South Sudan government would turn out. But the interests of the company and the authority are set to become strongly intertwined.
White Nile previously said South Sudan – via state-owned Nile Petroleum – will get a substantial stake in the company following the award of the oil rights.
Nile Petroleum’s holding in U.K.-listed White Nile would be the first time an African national oil company had a market listing, albeit indirect, on a major international stock exchange.
Groves said he had already received strong interest from Wall Street institutional investors to back the project through a bond.
Separately, Groves said the South Sudan government had also been contacted for potential oil rights by numerous companies, including a Moldovan and a Russian concern, Energy Africa, which is part of Tullow PLC (TLW.DB) of Ireland and Sinopec (BYH) of China.
Sinopec and Tullow couldn’t be reached.