RAISING THE STAKES IN WHITE NILE/TOTAL CONTROVERSY

C O N F I D E N T I A L SECTION 01 OF 02 KHARTOUM 001188

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/21/2016
TAGS: EPET PREL ASEC PINS FR SU
SUBJECT: RAISING THE STAKES IN WHITE NILE/TOTAL CONTROVERSY

REF: KHARTOUM 826

Classified By: Acting P/E Chief Michael Honigstein for reason: Section
1.4(b) and (d).


1. (C) Summary. The White Nile Limited (WNL)/Total
controversy has become increasingly ugly. There is
speculation that Khartoum interests were behind a recent
attack on a White Nile Ltd. (WNL) seismological team. At
least one Government of Southern Sudan (GoSS) official has
accused Total of involvement as well. There has still been
no GoSS decision on how to handle the petroleum controversy,
but the latest developments have changed the complexion of
the issue. End summary.

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Who Dunnit?
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2. (C) A Zimbabwean mine removal contractor for WNL told CG
on May 16 that a party of armed Murle raiders had attacked
the WNL Terraseis seismological team near the WNL camp in
Padak, north of Bor. There was a heavy exchange of gunfire
between SPLA soldiers who protect the WNL operation and the
raiders, who were operating far from traditional Murle
territory. The Zimbabwean knew of no casualties other than
four WNL security personnel who fled the scene at high speed
toward Bor in a Landcruiser, which overturned two miles down
the road.


3. (C) WNL Operations Director Phil Ward claimed no
knowledge of the incident, stating that all was calm in Bor
and that WNL still expected to sink its first well in the
last quarter of 2006. He said that he and his ASCOM partners
had overflown various sites in their respective zones in
ASCOM's MI-8 helicopter and seen nothing suspicious.

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Total Takes its Lumps
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4. (C) Local Total representative Jerome Servot (protect)
told CG on May 17 that he had just had a traumatic interview
with the GoSS ministerial committee of three charged with
drafting the GoSS policy position on how to handle Superbloc
B, claimed entirely by Total and partially by WNL. Servot
said that Justice Minister Michael Makwei had raised the
Murle attack, saying that the GoSS had evidence that Total
and Khartoum were behind this. He had warned Servot to stay
out of Bor and to limit his actions in the South.


5. (C) Servot admitted that the Total aircraft based in
Khartoum had overflown parts of Bloc B recently and
photographed the WNL camp in Padak, an ASCOM staging area
south of Bor on the exact site of the proposed Total camp,
and a third ASCOM site that indicated that the operation
ASCOM had advanced well past that of WNL and was set to begin
drilling wells. Servot said that when National Petroleum
Minister Awad Al-Jaz saw the photos, he became "absolutely
apoplectic." Servot speculated that Khartoum would not be
"stupid enough" to organize an attack on WNL. (Note: During
the war, the northern government did use proxy forces to
promote its political and economic agenda. End note.)

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GoSS Take
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6. (C) On May 18 CG met with GoSS Legal Affairs Minister
Makwei, who did not mention the Murle attack but expressed
great frustration that the GoSS had been unable to break the
Total/WNL impasse. He said that the GoSS had only three
options. First, they could choose a winner, either giving
the entire concession to Total or giving part of it to WNL
and letting Total have the rest. In either case, this GoSS
would end up in court. Secondly, they could encourage WNL
and Total to form some sort of consortium and share the same
area, which Total categorically refused, insisting that Bloc
A was all or nothing and there was no fallback. Thirdly, the
GoSS could leave the oil in the ground for the next five
years.


7. (C) Makwei added that the Khartoum Government could not
use its security services to drive out the local population
in Bor, as it had done in Heglig and Bentiu. He said that
Total also could not force its way in. He said that he had
told Servot that Total could take legal action against the
GoSS, but this would only make it for impossible for Total to
ever gain the confidence of southerners, and especially the
people around Bor. He had warned Servot that Total could try
and force investment if it wished, but in five years, should
the South go its own way, Total would be thrown out. They
could then seek legal remedy against those in the North with

KHARTOUM 00001188 002 OF 002


whom they had signed the contract in the first place, to the
exclusion of the South.
HUME