Total Asks to Revisit South Sudan Oil-Blocks, Minister Says

(Bloomberg) -- Total SA approached South Sudan about developing two of its biggest oil blocks after previous talks on the fields collapsed, according to the African nation’s petroleum minister.

"They have written to me that they are still interested" in blocks B1 and B2, Ezekiel Lol Gatkuoth said Monday in an interview in Cape Town. Tullow Oil Plc has also asked to discuss the blocks, he said.

South Sudan needs foreign investment to ramp up oil production -- currently at about 130,000 barrels a day -- after conflict that erupted in 2013 cut output. Discussions with Total on blocks B1 and B2 reached an impasse in April, prompting the country to open negotiations to new investors. The blocks are part of the former Block B, which the government says is the nation’s largest untapped oil deposit.

Total’s officials “weren’t forthcoming” during the discussions, Gatkuoth said. The parties disagreed on the length of the exploration period, capital-gains taxes and royalty terms, he said.

Emails to Total weren’t immediately answered.

"We’re still in discussions with the government around opportunities in South Sudan," said Robin Sutherland, general manager of new ventures in Africa for Tullow. "We think it’s a good opportunity” and there are "many options" for transporting oil from the nation with pipelines planned in neighboring Uganda and Kenya, he said.

Block B, a 120,000-square-kilometer (46,300-square-mile) area, was divided into three portions in 2012. South Sudan, which has Sub-Saharan Africa’s third-biggest oil reserves according to BP Plc, aims to pump 200,000 barrels a day by the end of this year and 350,000 a day by mid-2018.

--With assistance from Paul Richardson

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net.

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Rachel Graham