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Sudan Forms Consortium for Companies with Conflicting Concession Rights

06-02-2007

Sudan government has recommended that Total SA, the giant French oil and gas company and White Nile Ltd to work together in the same block where they both have the concession rights from different authorities.

"The National Committee recommended to the National Petroleum Commission that Block B can be a consortium that will include all, that is Total being the operator and White Nile being a member in it," Riek Machar, Vice President of South Sudan said.

He said the government had agreed to a similar arrangement in another block where Malaysia's Petronas and Moldova's Ascom Group have conflicting claims.

"Similarily in Block 5B there will be a new consortium composed of Petronas, Ascom, Lundin  and ONGC, Sudapet and Nilepet," Machar said.

South Sudan's semi-autonomous government had allowed exploratory drilling by White Nile and Ascom in areas already claimed by Total and Petronas, which say they signed with Khartoum before a 2005 peace deal ended more than two decades of north-south civil war.

Most of Sudan's oil lies in the landlocked south, although refineries and pipelines are in the north.

White Nile, which is 50 percent owned by state petroleum firm Nilepet, started drilling its first well in its disputed 67,000 square km (25,870 sq mile) concession in south Sudan last month. Its block was part of a larger concession previously assigned to Total by the Khartoum government.

White Nile had estimated that it has 3 billion to 5 billion barrels of oil in its block Ba concession, but that it would take four years before the oil starts to flow.

Machar said that Sudanese President Omar Hassan al-Bashir and southern President Salva Kiir had signed off on the committee recommendations.

"It was passed by the National Petroleum Commission at which those co-chairs were present," Machar said. He said Ascom and White Nile, which had been asked by Kiir to stop operations in the south, should restart operations soon.

"We don't know when but it would be soon because it would be a loss if they don't resume operations as the dispute has been settled," Machar said. "It's now a bygone, they should now start thinking how to do their operations as a new consortium."