Sudan wraps up deals over contested oil blocs

Sudan said this week it had finalised settlements on two disputed oil blocs in its strife-torn south as it seeks to reconcile agreements made by both the Khartoum government and former southern rebels. Some foreign firms have withdrawn after finding concessions empty of oil, while a Total-led consortium has been ordered to pay compensation to a firm forced out two years ago, illustrating the uncertainties of operating in the country.
Authorities in Khartoum and the semi-autonomous south have sparred over conflicting claims to oil rights since signing a 2005 peace accord that ended a 22-year-long conflict. Most of Sudan's oil has been found in the landlocked south, while refineries and Sudan's only commercial port lie in the north. Sudan's National Petroleum Commission (NPC) - which met this week after a long hiatus - ruled that a consortium led by France's Total must pay $11 million to former explorer White Nile Ltd, the south's oil minister John Luk said.
White Nile, which was ordered off the contested oil block in 2007, has since changed its name to Agriterra and shifted its focus to agriculture across Africa. The Total consortium also includes Kuwaiti Kufpec and Sudan's state oil companies Sudapet and Nilepet. Luk said the NPC had also confirmed Moldovan oil company Ascom had rights to explore the contested block 5b, after the withdrawal of the White Nile Petroleum Operating Company (WNPOC), a consortium led by Petronas of Malaysia.
WNPOC pulled out three months ago, the minister said, "because they had made some test drilling of three wells. They were dry and given the current financial crisis, maybe they didn't feel like investing more capital on the block." Luk said the commission was open to other companies coming into the block to form a new consortium with Ascom, which has also drilled three test wells that have been dry.
Ascom, like White Nile, signed on with the southern government after the peace deal even though the block had already been awarded to the Petronas consortium by Khartoum. For more than a year both companies were exploring for oil in the block. The NPC is the country's top oil decision-making body.
Luk added that two Spanish companies H Oil and Star Petroleum were interested in exploring the new block Ea, a long slim block that runs along the western flank of four other already commissioned blocks. The NPC had set up a committee to assess the companies and would "decide whether to allocate the block to both or to one", he said.