Petroleum ministry: Total to start Sudan operations by April

Reuters , Tuesday 25 Jan 2011

As south Sudan completes vote on secession, french oil company looks to start exploration with Qatar Petroleum south's Jonglei state

French oil giant Total SA is due to start exploration in south Sudan by April once state-owned Qatar Petroleum joins the consortium running the block, Sudan's petroleum ministry said on Monday.

Minister Lual Deng, a southerner, said once the south -- which has some 75 per cent of Sudan's 500,000 barrels per day output -- becomes independent as expected on 9 July, U.S. companies would be welcome to work there. Sudan has been under U.S. trade and economic sanctions since 1997.

Total has not begun work on Block B in the swampy southern Jonglei state despite holding the concession since the 1980s.

Total is the major shareholder in the block.

Sudan's south voted this month on a referendum on secession from the north ending decades of civil war and uncertainty around the future of Africa's largest country.

The ministry's head of exploration Azhari Abdel Gadir said Sudan was seeing heightened investor interest from many small companies, including Canadian Viking Oil & Gas Ltd, hoping to get a foot into Sudan's oil blocks before major players enter as secession looks to end peacefully without a return to war.

"Over the last six months or so we have experienced a rush from several oil companies," he told reporters. "It's not what you call your major oil companies but we do have over 15 applications, some of them from Canada."

Abdel Gadir and Deng in a joint news conference said Total was due to begin exploration by April as it looked likely Qatar Petroleum would take up the empty 20 per cent of the consortium running Block B.

"(Total) have suggested Qatar Petroleum International and so that is under consideration but all indications are would be that it will go smoothly -- it's a question of signing," said minister Deng. 

Abdel Gadir said the agreement with the Gulf firm should be completed by April.

"If things go as expected in April we will start work," he said.

Major firms have largely avoided Sudan because of allegations of rights abuses during the long north-south civil war and U.S. trade sanctions. But once the south is independent, the embargo will be irrelevant on blocks in the south.

Southerner Deng said U.S. companies will be allowed to invest in the southern oil industry after secession.

"We don't discriminate, we allow anybody to invest in Sudan's oil and that will be the attitude of the south should the south secede," said Deng.

Deng said Sudan hoped to reach 1 m bpd. But Sudan has consistently failed to reach bullish production forecasts offered by officials after a 2005 north-south peace deal looked to stabilise security in Sudan.

"In three years we are aiming to have 1 m barrels," Deng said.

Sudan's main oilfields are in decline and Malaysia's Petronas has been working to improve the yield from fields which Abdel Gadir put at an average of 23 per cent across Sudan. New discoveries have also been slow to come on line.

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