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Negotiations aim to create compromise consortia for disputed blocks


Bids to broker Sudan deals



By Upstream staff 

New attempts are being made to draw up compromise consortia for disputed exploration blocks 5b and B in South Sudan.

The South currently favours Moldovan explorer Ascom against Malaysian heavyweight Petronas on Block 5b and AIM-listed White Nile on Block B, which French giant Total also claims.

Upstream has confirmed that an attempt to broker a deal forcing White Nile into a consortium with Total and the two state oil companies Sudapet and NilePet has been negotiated.

White Nile was said to be “very confident” it will hold under the terms of what one senior executive claimed was a new detente reached by the northern and southern factions of the National Congress Party.

The new “superblock B” would include Block Ba, where White Nile was drilling until Juba forced a suspension last month, along with part-blocks Bb and Bc.

The deal pre-supposes resolution of the long-running border dispute in the soon-to-be-released Abiye boundary report, under which oil revenue sharing provisions are to emerge similar to those applied elsewhere under the 2005 Comprehensive Peace Agreement (CPA).

This latest accord has not been ratified by the National Petroleum Commission (NPC), leaving several observers doubting it can hold given overlapping claims by other suitors.

Many of these suitors have also signed up with the Sudan Peoples Liberation Army (SPLA), the movement that dominates politics in the South.

Similar doubts were expressed over another deal announced last week by the South’s Vice President Riek Machar Teny for Ascom to accept Petronas into Block 5b alongside Lundin and India’s Oil & Natural Gas Corporation.

Under the CPA no exploration and production deals can be deemed legal until signed off by the NPC, which comprises members of the South’s Juba administration alongside the sovereign North’s regime in Khartoum, cochaired by Sudan President Omar El-Bashir and the South’s President Salva Kiir.

White Nile is keen to resume operations on Kedelai-1 in Block Ba, but Kiir’s office stopped play to pursue an investigation into the contract’s history and how effectively benefits will accrue to the treasury under cost recovery terms agreed with his predecessor, Colonel John Garang.

Part of Kiir’s reluctance is understood to be consequent to a gentleman’s agreement with his second in command General Paulino Matip to instead award petroleum E&P and commodity export rights to Hong Kong-based Jarch Management Group.

The Jarch deals were signed with Matip when he was in opposition leading the South Sudan Defence Force.


Friday, 08 June, 2007, 06:29 GMT  | last updated: Friday, 08 June, 2007, 06:57 GMT

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