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      • Petronas to start work in south Sudan oil block

Petronas to start work in south Sudan oil block

Malaysia’s Petronas [PETR.UL] got permission from south Sudan’s government on Friday to begin oil exploration in block 5B, after agreeing to let Moldova’s Ascom Group keep part of the concession, an official said.

"Petronas from tomorrow will move into the location 5B," the south’s minister for industry and mining, John Luk, said. He is also a member of Sudan’s National Petroleum Commission (NPC), the country’s top decision-making body on oil matters.

During decades of civil war in Sudan’s south, oil contracts signed with the northern government were declared void by the southern rebels, who entered deals with smaller companies like Ascom to begin oil exploration in their areas.

Following a 2005 peace deal, the NPC mediated the conflicts of interest and in July last year agreed Petronas could keep its share in Block 5B provided it allowed Ascom, already working in the area, a share in the venture.

Block 5B lies partly in the swampy Jonglei state. Jonglei governor Kuol Manyang Juuk told Petronas, at a Friday meeting in the south’s capital Juba, that he would allow it access for the first time.

It was not immediately clear what percentage of the concession Ascom would take. "We have a committee to assess... They will come up with Ascom’s investment so that is taken into consideration when determining that share," Luk said.

Block 5B, covering more than 20,000 square km (7,723 sq miles), is operated by the consortium WNPOC (White Nile Petroleum Operating Company) led by Petronas and including India’s ONGC Videsh , Sudan’s state-owned Sudapet and Nilepet and Sweden’s Lundin Petroleum .

"It was a compromise between the two levels of government (state and national) that Ascom will join the consortium. Ascom will be a part of you, whatever," Luk told WNPC members.

He said Petronas equipment to conduct seismic testing in the area is already on the River Nile in vessels that would be unloaded in the 5B area on Saturday.

Luk said all petroleum companies should work more closely with the semi-autonomous southern government. "They must have presence in Juba and in the state capitals...for all the companies but starting with WNPOC," he said.

Around 2 million people died in the north-south conflict that analysts say was partly fuelled by the discovery of oil. Under the peace deal, south Sudan receives 50 percent of revenues generated from wells in the south.

Another company also signed by the former southern rebels, Britain’s White Nile lost its right to part of the massive Block Ba to Khartoum-signed French giant Total in an NPC ruling last year.

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