Sudan: Mubadala Leads Race for Total Sudan Project Stake

LONDON, April 23, 2008 (Dow Jones Newswires)

Mubadala Development Co. is the lead bidder for a stake in Total SA's (TOT) south Sudan block, with a decision due by the end of the month, according to the country's oil minister.

The sale of an interest in the Total block could herald the resumption of exploration in one of the African country's largest acreages.

Oil Minister Zubair Ahmed al-Hassan told Dow Jones Newswires this week that Abu Dhabi-owned fund Mubadala is "the strongest" candidate to enter Block B, and a deal is expected before the end of this month. The acreage, which is the size of Greece and thought to contain large reserves of oil, is operated by French oil giant Total.

The oil minister said China National Petroleum Corp. and Sinopec (SHI), two Chinese-owned companies already operating in Sudan, have also submitted bids.

Sinopec and CNPC had no immediate comment, while Mubadala couldn't be reached.

The oil minister said Tri-Ocean Energy, controlled by Kuwait's al-Kharafi family, has also inquired about the stake.

Total stopped operating in Sudan in 1985 after a civil war erupted between the central government and southern separatists. Last year, Total indicated it would resume activities following a 2005 peace accord and after Sudan upheld its license on the block.

A tiny U.K. upstart, White Nile Ltd. (WNL.LN), claimed rights on a large part of the block in 2005. But the minister said "it's over (for White Nile), they now have withdrawn from the block."

A Sudanese committee "now evaluates what work they have done until now...for compensation" in cash but not for a stake in the field. White Nile didn't return a request for comment.

The minister said Total returned to the block this year.

A Total spokesman said that the return consisted of temporary missions. He added that a permanent presence would be dependent on security on the ground and would include a socio-economic development plan for the area.

A divestment of Marathon Oil Corp.'s (MRO) stake in the block and the entry of new shareholders is another condition set by Total to restart exploration.

Marathon, unable to keep its 32.5% interest in the block because Sudan is under U.S. sanctions, sold the stake to Total in March. The share adds to the 32.5% already owned by the French giant.

The Total spokesman said Wednesday the ownership of the Marathon shares was temporary and the company intends to sell them to a new foreign entrant as well as to a South Sudan concern. He declined to comment further.

In its annual report, Total warns that due to a law passed last year in Congress, state pension funds may have to sell their shares if it restarts exploration in Sudan. That "could have an adverse effect on Total's share price," it said.

The Total spokesman said it remained in contact with U.S. funds, explaining in particular its standards of operations.

LONDON, April 23, 2008 (Dow Jones Newswires)