Exxon ends South Sudan oil plans with Total

EXXON Mobil, the US’s largest oil company, has ended exploration plans with Total in South Sudan, Total and the government said — a sign of faltering investor confidence in the nation as a civil war enters its eighth month.

In April, Exxon did not renew an agreement with Total to negotiate for jointexploration over parts of a 120,000km concession in Jonglei state, Total spokeswoman Anastasia Zhivulina said on Tuesday in an e-mailed response to questions.

She said Total was still bidding to explore in partnership with Kuwait’s state-owned Kuwait Foreign Exploration Petroleum Company.

Exxon spokesman Patrick McGinn said by e-mail that the company does not comment on specific ventures.

“Losing the American oil company’s interest is definitely a blow for the future prospects of South Sudan’s oil industry,” Luke Patey, a researcher on the country’s industry at the Danish Institute for International Studies, said in an e-mailed response to questions.

Mr Patey Exxon could South Sudan security improved.

Crude oil output, South Sudan’s almost sole source of revenue, has fallen by at least a third to about 160,000 barrels per day since conflict erupted in December and the army battled rebels in two oilproducing states.

The conflict — which has left thousands dead — led to the evacuation of some staff by the country’s main oil producers including China National Petroleum Corporation and India’s Oil & Natural said that re-enter

when Gas Corporation.

Petroleum Ministry spokesman Nicodemus Ajak Bior said in an e-mail he was aware of Texasbased Exxon’s “pull out”.

Paris-based Total has held the Block B concession in Jonglei state, near South Sudan’s eastern border with Ethiopia, since 1980 when it was part of a united Sudan.

Recurrent violence has hampered exploration and there have been no proven oil finds.

In September 2012, the government divided the block into three. Exxon is pulling out of its agreement to jointly-explore two of them, Ms Zhivulina said. The outbreak of war in South Sudan meant Total and the Kuwaiti company’s October offer for Blocks 1 and 2 has not been approved by the government.

Upper Nile state is the only region of South Sudan still pumping oil eight months after violence began between factions loyal to President Salva Kiir and his former deputy, Riek Machar.

The United Nations has said that a “man-made” famine is looming.

The US announced on Tuesday it would give $180m for emergency food aid to South Sudan, which is “facing the worst food security situation in the world”.

In May, Finance Minister Aggrey Tisa Sabuni said South Sudan had borrowed $200m from oil operators and postponed repayments on domestic loans.

“There is very little open virgin acreage left in the international oil industry,” Mr Patey said.

“Post conflict, big players like Total and Exxon will find the Block Bs in South Sudan hard to ignore,” he said.