French oil company Total will partner with U.S. major Exxon Mobil and Kuwait’s Kufpec in South Sudan to search for oil in the restive Jonglei state, a senior lawmaker in the African country said.
Sudan’s 1983-2005 civil war prevented Total, which has held a majority interest in Block B since the early 1980s, from exploring the 120,000 square kilometer concession in Jonglei in the east of the country.
Last year South Sudan’s government said it was negotiating with Total to split the block to speed up exploration and raise much-needed government revenue.
Henry Odwar, chairman of South Sudan’s parliamentary committee on energy and mining, said on Saturday the area was now being broken into blocks B1, B2 and B3.
“Now Total has gone ahead and, with a nudge from the (oil) ministry, engaged certain partners. Exxon Mobil and Kufpec have been brought in to be a partner in Block B1,” Odwar told Reuters in an interview.
Another industry insider has told Reuters the deals are yet to be finalized but block B2 is likely to be held by the same partnership of companies. The government is yet to decide on the fate of B3, the source says.
Exxon declined to comment, while Total said it had since December been in talks with the government about the “contractual terms” of the block. Kufpec, Kuwait’s state oil exploration arm, could not be immediately reached.
In May, South Sudan restarted oil production in its main oilfields, ending a 16-month shutdown triggered by a dispute with Khartoum over pipeline fees.
South Sudan wants to start exploration in Block B1, B2 and B3 because of declining reserves in its main producing fields where state-owned China National Petroleum Corp (CNPC), Malaysia’s Petronas and India’s ONGC Videsh are active.
Enduring mistrust with between the two Sudans means the South is keen to build alternative pipelines through Kenya or through Ethiopia to Djibouti.
But oil industry analysts say such a project would be hardly viable without new oil discoveries in commercial quantities.
The government is pinning its hopes of fresh finds on blocks B1, B2 and B3 but any exploration plans in the short term would likely be hampered by escalating fighting between the army and rebels led by David Yau Yau.
Odwar also said the finance ministry had signed loans up to $1 billion using South Sudan’s oil as collateral, adding he was not aware of the rate or terms.
He also said South Sudan planned to build a dam on the White Nile to generate badly-needed electricity in one of the least developed countries. Even the capital Juba has no regular power.
“I think the Fula dam is going to be about 60 megawatt and just going to be a slice of the Nile 9 to 12 meters wide,” Odwar said, adding he hoped it should be producing within 17 months.
“Because of its size it will never affect any water levels such that Sudan and Egypt would even raise an eyebrow. There won’t be a reservoir behind it,” he said.