South Sudan Government Asks Britain's White Nile to Leave Oil Block
July 6, 2007 (JUBA) — Sudan has asked Britain’s White Nile Plc to withdraw from a disputed oil block in the south and will assess compensation to the firm, south Sudan’s industry minister said on Friday.
"White Nile is to pull out from Block B, and its properties will have to be assessed by a technical committee appointed by the ministry of energy and mining to be refunded," Albino Akol Akol told Reuters.
White Nile Ltd said it "has had no official indication of these resolutions and is contacting government figures in Southern Sudan to account for this new information and clarify the situation" regarding Block Ba in Southern Sudan.
In its resolution of June 17, the National Petroleum Commission stated : "The pulling out of the British White Nile Co from Block B and its removal from entering as partner by purchasing the share of Marathon Co. refrained from the Block."
White Nile shares fell 17p, or 16 per cent, to 90p, after the company admitted its pull out by the Sudanese authorities.
The block was disputed between French oil giant Total SA and the British exploration company, which is 50 percent owned by the semi-autonomous south Sudan government oil company Nilepet.
Total had taken the dispute to a British court.
But the decision to ask White Nile to withdraw was made by the Sudanese National Petroleum Commission which under a north-south peace deal has authority to assign oil contracts.
Akol is a member of that commission. He said the exact consortium percentages of Block B were as yet unclear, but the south’s state oil company Nilepet and the northern state company Sudapet would each have a 10 percent share.
"So the percentages of the consortium will have to change," said Akol.
Total originally had 32.5 percent, as did U.S. Marathon Oil Corp . Kuwaitis had 25 percent and Sudapet 10 percent.
Marathon, because of U.S. sanctions, had pulled out of the block, Akol added. He said a replacement company was still to be found, but that White Nile was out of the running.
South Sudan’s semi-autonomous government had allowed exploratory drilling by White Nile in areas already claimed by Total, which says it 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 started drilling its first well in its disputed 67,000 square km (25,870 sq mile) concession in the swampy Jonglei state earlier this year.
Its block, Block Ba, was part of a larger concession, Block B previously assigned to the Total-led consortium by the Khartoum government.
White Nile had estimated that it had three to five billion barrels of oil in its Block Ba concession, but that it would take four years before the oil would start to flow.
South Sudan’s Vice President Riek Machar had said White Nile would work together with Total in the block.
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