White Nile Spuds First Southern Sudan Well in Disputed Block

UK-listed exploration company White Nile recently spudded its first exploration well on the disputed Block Ba in southern Sudan, almost exactly as scheduled (IOD Feb.27,p8). The Kedelai well, which is 200 kilometers (124 miles) north of Juba in Jonglei State, will be drilled to a depth of around 2,400 meters (7,850 feet), with completion targeted for mid-May, White Nile said. The company hopes the drilling can prove up a sub-basin which is analogous to the Muglad Basin to the northwest of the block, where the producing Thar Jath, Mala, Heglig and Unity oil fields are located. On Tuesday, Total told International Oil Daily it "regretted" that White Nile was drilling in the disputed block but had no further comment. White Nile earlier shot high-density, 2-D seismic over what it calls the Jonglei sub-basin and said it showed "a sedimentary section of up to seven kilometers in thickness and rift structures suitable for forming hydrocarbon traps." The Kedelai well is on one of several such structures that the company plans to target, drilling at four separate locations. White Nile Chairman Phil Edmonds said in a statement that the spudding was "not only a key moment for White Nile, but it is also a milestone for the people of Southern Sudan. Through the equity holding in White Nile by the state-owned oil company of the Government of Southern Sudan, Nile Petroleum [Corp.], the people will be major beneficiaries in the development of Block Ba." The UK company's claim to operate Block Ba, which it secured through a May 2005 agreement with the Government of Southern Sudan, is being challenged by French major Total, which has held a license for a vast area, known as Block B, that includes the same acreage. Total was first awarded the massive block in 1980 and renewed its license in December 2004, just before the January 2005 Comprehensive Peace Agreement for Sudan. Total's agreement is with the Sudanese national government in Khartoum, not the new southern administration in Juba (IOD Jul.26,p3). In a recent interview with Energy Intelligence, Total Chairman Christophe de Margerie said his company was caught between the rival claims of the north and south to direct oil policy, which, in theory, should be settled by a national body, the National Petroleum Commission, which includes representatives from both regions but rarely meets. Edmonds has described the French major as "neocolonial" and says White Nile, which is listed on London's secondary Alternative Investment Market stock exchange. In his interview with Energy Intelligence, de Margerie said, "There are these companies saying that we are doing business in a strange way. Frankly, I wish that they'd be as transparent as we are." Separately, Reuters on Tuesday reported the failure of efforts to resolve a similar dispute -- between Moldova's Ascom and Malaysian state Petronas -- over drilling rights in Block 5B (IOD Mar.15,p5). Peter Kemp, London