In a big to detach itself from the oil deals that were signed before its independence last year, South Sudan has seized a 74,000-square-mile oil zone, formerly held by Total for over 30 years, and sliced it into three parts to get things going in oil exploration. One of the parts would remain with the French energy company, which had signed an agreement with Sudan over three decades ago, but after the creation of South Sudan the deal isn’t valid anymore since the current government that has control over the oil block wasn’t party to the agreement. The other two slices of the cake would be given to Kufpec from Kuwait and the American company Exxon Mobil – the former has already claimed nearly 25 percent of this unexplored block: Block B.
The move is summoned amidst unyielding tension between Sudan and South Sudan with regards to the control over borderline oil zones. And hence Juba is doing all it can to ensure that all the deals signed by Khartoum before South Sudan’s independence are declared null and void. And it wasn’t as if Total was successful in expediting exploration is this block, and 30 years is a huge span of time by all accounts.
The ongoing tensions with Sudan aside, South Sudan had virtually grown sick of the ‘total’ inactivity on the part of the French company that would not be compensated for the loss of two-thirds of its share over the oil zone. Total had an excuse that the ongoing civil war from the early 80s till 2005 was a major reason behind the inactivity, but the seven years after the civil unrest ceased, Total had done a grand total of zilch with regards to exploring the oil opulence in the zone. And hence it’s evident that Juba now needs new players to handle the nerve center of its economy.
South Sudan is in dire need of proper exploration activities if it wants to boost its oil reserves, which have long been the victim of inactivity, primarily because of security concerns. Juba currently has a 0.35-million barrels per day oil produce, which is expected to take a nosedive in the near future, simply because there hasn’t been sufficient exploration activity.
The country needs to counter the animosity of its northern neighbor, the country that it gained independence from, one that controls the pipelines that transport the oil extracted from South Sudan – a landlocked country. Juba also needs to disengage itself from all the deals that Khartoum signed when South Sudan was a part of Sudan if it wants to dig itself out of this hole, which is why this proverbial hand gesture to Total is a promising step. Slicing their scrumptious cake into three parts could mean a diversity of companies, with their varying interests and strengths, and it would be a long-term triumph even if only one of them managed to extricate oil on time and in its targeted volume.
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