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UK White Nile to prospect in disputed block Ba

Feb 7, 2006 (NAIROBI) — Questions over the ownership of oil-rich Ba area of Southern Sudan was put to rest last week when Paul Mayom Akech, legal adviser of the government of Southern Sudan, officially launched oil explorations jointly with British oil and gas exploration company White Nile Ltd in Padak in Jonglei State.

 

French oil giant Total claims prior rights to the same block - commonly referred to as Block Ba - saying it had signed an agreement to explore for oil and gas with the Khartoum government in the 1970s before the the civil war.

 

The company pulled out of Southern Sudan at the height of the war in the 1980s and claims it signed the deal again with the northern government in January last year.

 

However, the claim has been rejected by the Southern Sudan government. "The Total claim is not an issue; the Nile Petroleum and White Nile agreement supersedes the Total deal. The government of Southern Sudan and Nile Petroleum Corporation are happy with the new agreement," said Mr Akech, who is also chairman of the corporation that is charged with oil and gas award concessioning and licensing in Southern Sudan.

 

Mr Akech says White Nile is owned in part by the people of Southern Sudan through their government. "The people of the Southern Sudan can now control their own destiny," he says.

 

"White Nile can now rest assured that their interests and rights are fully protected," added Brig Philip Thon Leek, governor of Jonglei State. "Khartoum does not control land is Southern Sudan."

 

Brig Leek and a delegation from Bor County were receiving oil drilling equipment, boats, generators and trucks for Jongolei State from Nile Petroleum Corporation and the White Nile during the launch.

 

"The White Nile model was developed to enable the Sudanese people to maximise the value of their oil assets as well as benefit directly from the generation of revenues," said Philip Ward, the firm’s chief operations manager.

 

Rather than follow the traditional royalty route, says Mr Ward, White Nile offered to include the locals by giving Southern Sudan’s state-owned Nile Petroleum Corporation half of White Nile, with an option to own up to 50 per cent of the firm.

 

"With an equity stake in White Nile, the people of Southern Sudan have the ability to control the destiny of their oil assets and provide them with significant economic empowerment," he said.

 

The deal between the people of Southern Sudan and the White Nile, adds Mr Akech, provides financial and economic independence and reduces the reliance on major corporates who are driven by their agendas. "The White Nile model gives control to the owners of the assets. It provides immediate, medium and long-term financial reward," he says.

 

A Canadian company, Terra Seis Geophysical, a subsidiary of Terra Seis International, has been evaluating Block Ba on behalf of White Nile. Garth Pachal, Terra Seis’s project manager, says, "If everything goes according schedule, we expect to sink the first oil well by mid this year."

 

White Nile is quoted on the London Stock Exchange as an oil and gas exploration and production company. Its chairman is former Middlesex and England cricketer Phil Edmonds. The company has a 50 per cent stake in the 65,000 sq km Block Ba exploration area, which experts say may hold as much as five billion barrels of oil.

 

Nile Petroleum has 155 million shares (50 per cent) in White Nile.

 

White Nile listed on the Alternative Investment Market in February last year without any assets, and its shares soared more than 1,000 per cent in less than a week of trading after the company’s announcement that it had struck an agreement with the new government over developing the Block Ba oil deposits.

 

However, the stock was suspended in February 2005 after White Nile’s ownership of Block Ba was challenged by Total of France.

 

Trading was resumed only after Mr Edmonds and his partner Andrew Groves, White Nile’s managing director, acquired a contractor’s licence from the South Sudanese leadership council.

 

The licence set out what would be spent on exploration, the contractors to be used and the system for training local people in the region.

 

Under the deal, the Sudan People’s Liberation Movement handed over part of Block Ba to White Nile. The deal states that both sides will respect any oil contract signed before the date of the peace deal - January 9, 2005 - and any deals after a new government of unity is formed will be decided by a joint petroleum commission from the national Energy and Mining Ministry.

 

Southern Sudan is an established petroleum producing area and includes part of the continent-wide Cretaceous rift basin system that has proven reserves in Chad and Niger. Disputes over oil fuelled a civil war there for more than two decades, claiming two million lives mostly from hunger and disease.

 

Sudan’s current daily oil production of around 500,000 barrels per day is expected to rise by 20 per cent in 2006. The current proven reserves are 1.2 billion barrels.

 

A peace deal signed in January 2005 ended the country’s and Africa’s longest civil war and has revived interest in Sudan’s potential oil reserves.

 

In May 2004, after two years of negotiations that began with the Machakos Protocol, the Khartoum government and SPLA reached an agreement on several major issues, including the sharing of oil revenues (at 50/50), and the application of Islamic religious law only in the north.

 

On December 31, 2004, the government and SPLA finalised a comprehensive peace agreement. A new constitution for Southern Sudan was signed in Juba, the South’s administrative capital, on December 5, 2005. General elections will be held in the third year of a six-year transition period.

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