Total SA quits DRC crude search, partner says

By William Clowes on 5/29/2019

KINSASHA, Democratic Republic of Congo (Bloomberg) -- Oil giant Total SA, the only oil major exploring for crude in the Democratic Republic of Congo, indicated it’s pulling out of a block in the central African nation, one of its partners said.

The French company has been searching for oil in Block 3 in eastern Congo since March 2011. Its license for the field, near the border with Uganda, initially expired in January 2016 and has been extended several times, including this month.

Efora Energy Ltd., based in Johannesburg, closely held South African company Divine Inspiration Group Ltd. and the Congolese government are partners in the block. The area may contain as much as 1.2 Bbbl of recoverable oil, according to Efora’s estimates.

Total “has indicated that it will no longer continue as part of the consortium to further explore” the concession, Efora said in a May 22 statement announcing the license that expired in January has been extended until July.

Total said in an emailed response to questions that the “sharing production contract of Total E&P DRC on Block 3, and the related exploration license expired on January 27, 2019.” It didn’t comment further.

Downstream businesses

Interim Congolese Hydrocarbons Minister John Kwet’s chief of staff, Tony Chermani, said Tuesday that Total hasn’t notified the government officially of any decision to withdraw from the block. He confirmed the extension of the permit.

Should Total’s exit from Block 3 be confirmed, the company will remain active in Congo through its network of 45 gas stations. The firm also markets petroleum products in the country.

Efora and its remaining partners plan to use the extension of the license period to “carry out a review of the technical data to determine the area that will be the subject of the renewal of the license in July 2019,” it said.

The new permit is expected to exclude territory that “lies largely” in Virunga National Park, according to Efora. The conservation site provides sanctuary to many of the world’s 1,000 mountain gorillas.

Total has a controlling stake in another, more advanced oil-exploration project on the Ugandan side of the Congolese border, in partnership with China’s Cnooc Ltd. and London-based Tullow Oil Plc. Uganda plans to start exporting crude in 2022.

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