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French Total Back In Contention For Coveted South Sudan Blocks

South Sudan

Total SA is back in the running to develop two oil blocks in South Sudan after previous negotiations for the French company to work the same fields collapsed in April, according to a new report by Bloomberg.

"They have written to me that they are still interested" in B1 and B2, Petroleum Minister Ezekiel Lol Gatkuoth told Bloomberg in an interview in Cape Town. U.K.-based Tullow Oil is also in talks to explore the dual areas, he added.

The world’s youngest country has been tearing itself apart in a civil war since 2013. Oil output has fallen to 130,000 barrels per day, as opposed to just over 350,000 bpd before the war started. But foreign investment in the two blocks —portions of a single block, which the government has claimed to be the largest untapped oil deposit in the nation—could help restore the oil sector.

Total had not been “forthcoming” during the former round of negotiations, Gatkuoth said, adding that points of disagreement included exploration timelines, taxes, and royalties. South Sudan is currently the only mature oil producer in East Africa.

"We’re still in discussions with the government around opportunities in South Sudan," Robin Sutherland, head of Tullow’s new ventures in Africa. "We think it’s a good opportunity” and that "many options" exists for the transportation of crude via pipelines to Uganda and Kenya, he said. The construction of 4-5 refineries will enable the export of refined petroleum products as well.

Block B had previously been united under a single tender, until Juba divided the 46,300-square-mile area into three parts in 2012. Estimates by British Petroleum say the country has the third-largest reserves in Sub-Saharan Africa, which the federal government plans to pump at 200,000 barrels per day by the end of 2017 and 350,000 barrels per day by June 2018.

By Zainab Calcuttawala for Oilprice.com

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