South Sudan’s Ministry of Petroleum says it has formally terminated negotiations with French international oil company Total for exploration and production sharing agreements (EPSA) for oil licenses B1 and B2.
In a press statement to Energy Window International, Total has held a petroleum agreement for the 120,000-square kilometer Block B even prior to the country’s independence in 2011, but had ceased activities in the area in 1985. In 2012 the government split the area into three licenses: B1, B2 and B3. Alongside Tullow Oil and the Kuwait Foreign Petroleum Exploration Company (KUFPEC), Total has been negotiating with the Ministry of Petroleum for a new EPSA since February 2013. In 2017, the Ministry of Petroleum awarded the EPSA for Block B3 to Oranto Petroleum, as talks continued with Total and partners on blocks B1 and B2.
Under Section 100 of the Petroleum Act of 2012, the account indicated, the Ministry of Petroleum can, without any hindrance, and at its discretion, enter into new petroleum contracts with contractors that had concluded an EPSA with Sudan before secession. The account stated further that after more than five years of difficult negotiations, the parties were rather able to reach a complete impasse, with the Ministry of Petroleum of South Sudan declaring its willingness to proceed with the signing of a draft EPSA, but that Total insisted on an extremely long exploration period, economic conditions that would not be viable for the government.
Quoting South Sudan’s Minister of Petroleum Hon. Amb. Ezekiel Lol Gatkuoth, the statement said: “The Ministry of Petroleum regrets that negotiations with Total have concluded with no deal, but looks forward to bringing new investors into talks for these licenses.”
“South Sudan needs to move quickly to bring investment to blocks B1 and B2, and after a long period of talks Total has been unable to agree on economic terms and a timeline that work for the country. Without this cornerstone in place, the Ministry of Petroleum cannot continue to negotiate an EPSA with Total. We are keen to discuss the exploration of Blocks B1 and B2 with new parties.”
The Minister who is expected to speak at the Africa Oil & Power conference in Cape Town on September 5-7 is therefore inviting potential investors to attend the South Sudan Oil & Power 2018 conference in Juba on November 21-22, to learn about the Ministry of Petroleum’s development plans for its exploration and production acreage.