UK oil firm sells itself to Sudan rebel group
By Tom Bergin
LONDON, March 4 (Reuters) – UK oil firm White Nile said on Friday that a deal aimed at gaining rights to a Sudanese oil field effectively meant the company was being taken over by a south Sudan rebel group.
The announcement was the latest bizarre twist in a drama that saw the company’s shares rocket almost 1,400 percent within days of being listed on the London Stock Exchange’s junior AIM market.
White Nile said on Feb. 16 it had acquired a 60 percent interest in an oil-rich block of land twice the size of Belgium from the Government of South Sudan.
On Friday, White Nile spokesman Hugo de Salis said the firm would pay for the interest with its own shares. He would not say how much of the firm is being ceded as this was still being negotiated.
However, de Salis said the stake would be so large that the deal is now being deemed a reverse takeover of White Nile by the national oil company of the Government of South Sudan.
A peace deal signed between the Khartoum government and the southern rebel Sudan People’s Liberation Movement (SPLM) in January paved the way for some autonomy for south Sudan. However, it is unclear when the agreement will come into effect.
White Nile signed its agreement with representatives of the SPLM. The Khartoum government says it is the only body with authority to make oil deals and French oil firm Total says it has the oil rights to land that White Nile claims.
The London Stock Exchange was not happy that White Nile’s Feb. 16 statement sufficiently outlined the risk factors surrounding the deal.
“We’ve had a frank discussion with them and the consequence was them asking for their shares to be suspended,” London Stock Exchange spokesman Richard Webster-Smith said.
White Nile, which lists former England cricketer Phil Edmonds as a founding shareholder, is preparing a circular outlining full details of the deal.
The company’s main asset aside from the potential Sudan deal is 9 million pounds ($17.16 million) in cash raised before its Feb. 10 listing.
The stock exchange said the deal should be approved by shareholders.
“Possible issues surrounding the validity of this transaction will need to be addressed in the circular that will go to shareholders,” Webster-Smith said.
The circular will be sent out later in March. White Nile’s shares remain suspended.
Total suspended its operations in southern Sudan in 1985 due to worsening security conditions as rebels stepped up their fight against the Khartoum government. Total says activities could only resume once peace was restored.