Total Prepares to Start Drilling in Sudan Despite Regional Conflict

DUBAI (Dow Jones Newswires), Apr. 9, 2009

French oil major Total S.A. wants to start drilling in southern Sudan as it seeks to boost output from Africa's sixth-largest producer despite international pressure on the country's government.

"We are just preparing ourselves to resume," Yves-Louis Darricarrere, Total's President of Exploration and Production, told Zawya Dow Jones at the sidelines of an energy conference this week.

In 1985, Total was about to drill three oil wells in Block B when the security situation in the area deteriorated after the country descended into a civil war between the Sudanese Government and rebel movement the Southern Peoples' Liberation Army, or SPLA, two years earlier.

The recent issuance of an arrest warrant for Sudan's President Omar Hassan Al Bashir by the International Criminal Court at The Hague, on charges of war crimes and crimes against humanity in Darfur have again brought international scrutiny on oil companies in the Sudan which has been under U.S. sanctions since 1997.

Total acquired Block B in 1980. It is located in the south and encompasses the area where the El Muglad and Melut oil basins join. The block stretches to the Ethiopian border and covers an area of around 118,000square kilometers.

Total and its consortium suspended activities in the country till 2004, when a peace agreement between the Government and Southern Peoples' Liberation Movement (SPLM) was signed in Naivasha, Kenya.

The company signed in 2004 a revised exploration and production sharing agreement with the Sudanese Government and a year later appointed a representative in Khartoum, the country's capital, according to the Total web site.

Darricarrare said a series of steps including the announcement of the new holder for a Block B concession, previously held by U.S. consortium Marathon Petroleum Sudan Ltd. before it had to withdraw due to political pressures, had to be revealed before drilling could begin.

"For the last three years Total have been getting ready to drill, bringing in machinery to the country and they continued to renew their operating license throughout the war," said one Sudanese industry expert familiar with the matter.

Other Block B stakeholders include Kuwait Foreign Petroleum Exploration Company, or Kufpec and state-owned Sudan National Petroleum Corp., or Sudapet.

Copyright (c) 2009 Dow Jones & Company, Inc.

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