South Sudan Seeks New Oil Investors After Total Talks Collapse

LAGOS (Capital Markets in Africa) – South Sudan’s government opened negotiations on two of its biggest oil blocks to new investors after discussions with Total SA collapsed.

Discussions about blocks B1 and B2 with the French oil company over the past two weeks reached an impasse over the proposed exploration period and “cost-recovery limit,” Petroleum Minister Ezekiel Lol Gakuoth said in a statement he forwarded by email on Monday. Total didn’t immediately respond to an emailed request for comment.

“Following lengthy discussions with representatives of the company, Total, we have decided it is in the best interest of South Sudan to open opportunities to other potential investors,” Gatkuoth said. “We had hoped for a favorable outcome but we believe these large and highly prospective blocks need a fast and ambitious development program to achieve their full potential.”

The two blocks are part of what was formerly known as Block B and which the government says is the country’s largest untapped oil deposit. The 120,000 square-kilometer (46,332 square-mile) area was divided into three portions in 2012. South Sudan has Sub-Saharan Africa’s third-biggest oil reserves, according to the BP Statistical Review of World Energy.

Last month, the government granted Oranto Petroleum International Ltd. of Nigeria a license to explore for oil in block B3.