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South Sudan Oil Conference Urges Full Operation Of Petroleum Commission

Middle East Economic Survey

VOL. XLIX

No 47

20-Nov-2006

SUDAN

South Sudan Oil Conference Urges Full Operation Of Petroleum Commission

The Sudan Oil Conference – a meeting convened in Juba, capital of South Sudan, on 1-2 November – concluded with a statement calling for transparency in the management of oil revenues, and the “operationalization” of the country’s National Petroleum Commission (NPC). The conference was organized by the European Coalition on Oil in Sudan (ECOS) and the New Sudanese Indigenous NGOs Network, and was attended by the south Sudanese Vice-President, Riek Machar and Minister of Energy and Mining, Angelina Teny. The Civil Society Statement on Sudan’s First Oil Conference said: “The NPC is the most important mechanism towards the realization of equitable oil distribution and revenue utilization. We strongly urge its operationalization. Furthermore, other commissions provided for within the Comprehensive Peace Agreement (CPA) such as the Land Commission should be immediately made effective.”

Guidelines for the establishment of the NPC were laid out in the CPA signed in late 2004 which ended two decades of civil war. But the strategic importance of Sudan’s oil – most of which lies in the south – has meant that the NPC (formally established in November 2005 – MEES, 2 and 9 January) has fallen victim to power struggles between the governments of the north and south. The conference statement went on to demand “transparent and accountable systems in oil management and all other levels of governance,” and urged joining the Extractive Industries Transparency Initiative (EITI). The involvement of local communities, civil society organizations and other stakeholders in the oil extraction process was also emphasized, as was the need for laws to ensure the corporate social responsibilities of oil companies.

White Nile Eyes 2007 Drilling Program In Disputed Block B

One of the key issues which highlights the divisions between the north and south over oil is the dispute between France’s Total and the UK’s White Nile. The latter has exploited its connections with the Government of Southern Sudan (GOSS) and the local animosity towards oil companies and the Khartoum government for failing to share the benefits of oil, and has completed the first phase of seismic operations in Block Ba – part of the larger Block B claimed by Total in an agreement with Khartoum. Over 500km of high-density 2D seismic has been collected and interpreted from the Jonglei sub-basin of the Muglad basin. Several prospects have been identified, including one large structure high-graded as an immediate drilling target, says White Nile. The first exploration well is expected to spud in the first half of next year, followed by two more during the course of 2007.

Nevertheless, Total continues to maintain its claim to the block and is reported to be paying Khartoum $1.5mn a year in order to renew its contract. Total has set out its claim to the block (MEES, 21 November 2005), and later won a ruling in the UK High Court forcing White Nile to disclose details of its negotiations for Block Ba (MEES, 29 May). White Nile Chief Operating Officer, Philip Ward, claims that Total is taking the GOSS to court. But a spokeswoman for Total told MEES recently that she was unaware of any such court proceedings. The dispute will rumble on, but White Nile’s development plans for the disputed block remain bullish. And with many South Sudanese currently in favour of secession – a choice which, agreed to by both sides in the CPA, will be offered to them around 2010-11 – White Nile is confident in its long-term hold on the block.

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