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. -------------- Who Dunnit? -------------- ¶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. -------------- Total Takes its Lumps -------------- ¶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.) -------------- GoSS Take -------------- ¶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