Businessman Billy Rautenbach, who has been linked with several businesses involving top politicians in the Zimbabwe African National Union-Patriotic Front, was reported to have gone into business with former English cricket player Phil Edmonds whose company was involved in a dispute over oil deals in Sudan.
Edmonds was chairman of White Nile Limited, a company that was listed in London, but was reported to have obtained an oil deal in Sudan which was being contested by a consortium that included top French oil company, Total.
Rautenbach was at the time involved in questionable mineral deals especially in the Democratic Republic of Congo and was wanted in South Africa for fraud.
He was reported to be so close to ZANU-PF and President Robert Mugabe’s government that he was added on to the European Union and United States sanctions lists.
Viewing cable 06KHARTOUM417, SUDAN: TOTAL AND WHITE NILE PETROLEUM MANEUVER TO
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C O N F I D E N T I A L SECTION 01 OF 03 KHARTOUM 000417
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SUBJECT: SUDAN: TOTAL AND WHITE NILE PETROLEUM MANEUVER TO
CONTROL BLOCK BA
Classified By: DCM ANDREW STEINFELD FOR REASONS 1.5 (B) (D)
¶1. (U) SUMMARY: The confrontation between Total and the
UK-based White Nile Limited (WNL) continues, with both sides
claiming the right to develop Block Ba in Southern Sudan.
Total, in a consortium that includes Marathon Oil, was
granted the concession over 25 years ago by the government in
Khartoum. However, White Nile Petroleum enjoys the support
from elements in the Government of Southern Sudan (GoSS),
which actually controls the region. The Comprehensive Peace
Agreement (CPA) specifies that all existing petroleum
contracts remain valid, and Total has decided to remain
closely aligned with the NCP and pursue its claim in British
courts. WNL has worked on getting support in the south and
plans to move forward with drilling within the next few
¶2. (U) This dispute has caused political infighting in the
south, divided largely along the lines of existing factions.
Some GoSS members believe that the WNL deal lacks
transparency and runs contrary to the CPA, while others are
investors in the undertaking, including, possibly, GOSS VP
Machar and his wife, who is deputy Energy minister of the
GNU. Further questions as to WNL,s intentions are raised by
the fact that the chairman of WNL is also involved in
separate business deals with Billy Rautenbach, the white
Zimbabwean businessman who has an outstanding warrant for
fraud in South Africa.
¶3. (C) We will continue to monitor developments closely: a
U.S. company is involved; there exists a smell of corruption,
or at least conflict of interests; and a contest over this
oil field could exacerbate tensions between north and south.
¶4. (U) The following is an annotated chronology of events
from 1980 to the present:
1980: Total is granted a concession in Block B (central), the
largest and furthest south of the oil blocks. Covering over
118,000 sq. km, the block overlaps four southern states and
7 oil basins: Bor, Pibor Post, Mongalla, Tali East & West,
and Boro North & South.
1981-1985: Total explores its concessions, focusing on the
first three basins, and decides to begin drilling in Bor.
1986: Before drilling can begin, an SPLA attack kills two
Total employees. Total ceases operations, but maintains its
concession with a yearly payment.
Dec 19, 2004: White Nile Limited registers as a company in
England with a capital base of 60,000 pounds and Phil
Edmonds, the famous cricket player, as chairman.
Dec 21, 2004: On the eve of the CPA, Total signs a revised
Exploration and Production (E&P) agreement.
February 2005: WNL is listed on the London Exchange. Its
listing application includes a statement that it signed a
concession agreement with the GoSS sometime in 2004 for Block
Ba, a 70,000 sq km subsection of Block B (central)
encompassing most of the known reserves. Geological data is
identical to Total,s data from the early 1980s.
March 2005: Trading for WNL stock is briefly suspended due to
the dispute with Total. Trading begins again when WNL
produces a contracting license from the GoSS. WNL stock
jumps from a total value of 9 million pounds to 123 million
pounds as the company announces plans to drill in Bor, where
total hidpanned to f2alL iv Q19Q*QQ
~}>~_?=>g>??Q_;CQtV?Q9L through legal
challenges in England, WNL moves ahead. WNL names
exploration expert Phillip Ward as CEO. Ward has worked with
Brown and Root in the Middle East and a British firm in
Libya. He reportedly has a Dinka wife. Terra Seis of Canada
will do seismological work.
KHARTOUM 00000417 002 OF 003
¶5. (U) Total,s concession agreement is a standard
exploration and production contract including clauses
requiring sustainable development and restitution of land.
Total is the sole operator with a 32.5 percent stake. Other
investors include U.S.-based Marathon Oil (32.5 percent),
Kufpec of Kuwait (25 percent), and the Sudanese state-owned
oil company, Sudapet (10% and first oil). After initial
outlays are repaid, profit sharing follows a curve that
guarantees Sudapet up to 85 percent within 12 years. Total
will also build a 450 km spur to the main pipeline at Heglig.
Additionally, Total has hired the Swiss Demining Foundation
to support WFP demining efforts in the area, and has offered
USD 2 million to the UNDP for development programs around Bor.
¶6. (U) The terms of the WNL deal are not public, although
newspapers have reported that Nilepet, the GoSS-owned oil
company, was given 50 percent of the shares in WNL and a 40
percent stake in the concession. It is unclear if the WNL
shares were given to the GoSS or individual members of the
GoSS. Newspapers also report that White Nile has agreed to a
variety of development programs around Bor. Dinka Bor chiefs
have signed a petition supporting WNL,s claims. The
Governor of Bor has shown similar support. Although only
part of Total,s Block B (central), Block Ba covers all the
proven reserves. Blocks Bb and Bc remain unexplored and are
characterized by malaria, non-existent development, and
¶7. (U) Total believes it has a strong legal case — the CPA
guarantees oil agreements signed before January 9, 2005.
Total is also quick to point out that WNL is a paper company
with no petroleum experience or financial infrastructure.
However, they admit that if WNL begins drilling, they will be
difficult to dislodge. As a result, Total has also announced
plans to begin drilling soon.
¶8. (SBU) There are other questions regarding WNL,s
legitimacy, including the recent announcement that Edmonds
has gone into business with Billy Rauchtenbach.
Rauchtenbach, a white Zimbabwean and close associate of
Robert Mugabe, has been involved in questionable mineral
exploitation deals throughout Central and Southern Africa and
is currently wanted for fraud in South Africa.
Questionable Deals and Suspicions
¶9. (C) Many in the GoSS feel that it can hold 100 percent of
the oil revenues in the deal with WNL because they interpret
the CPA to read that the 50/50 split only applies to revenues
collected by the GNU. Southern support is led by GoSS Vice
President Riek Machar, and his wife Angelina Teny, who is
also GNU State Minister of Energy and Mines. There are also
rumors that Machar and his wife were the recipients of large
blocks in WNL stock. Other GoSS supporters are the Minister
of Culture, Youth and Sports John Luc Jok (formerly GNU State
Minister for Energy before joining the GoSS), Minister of
Gender, Social Welfare and Religious Affairs Mary Kiden Wani,
and former SPLA security head and GoSS legal advisor Paul
Mayom. Mayom may also become a member of the board for
¶10. (C) Not everyone in the GoSS supports WNL. Minister of
Legal Affairs Michael Makuai, Minister of Regional
Cooperation Nhial Deng Nhial, and Minister of Industry and
Mining Albino Akol Akol, oppose the deal because of its
opacity and believe, at a minimum, that it has the appearance
of impropriety. They also believe that Total has the legal
claim under the CPA. GoSS President Salva Kiir has yet to
take sides. However, after Akol threatened to resign over
Machar,s suggested appointments to the Nilepet Board of
Directors, Kiir stopped the appointments and agreed to take
another look at the entire issue. Kiir plans on convening a
full cabinet meeting to discuss Nilepet, WNL, and Block B as
soon as he has a quorum, most likely this week.
¶11. (U) Meanwhile, Teny, speaking at a development
conference in Dubai, said that the National Petroleum
Commission (NPC) will meet to resolve the dispute. The SPLM
members on the NPC are Teny, Deng, Wani and Jok, with Kiir
serving as co-chairman. The NCP has said that the petroleum
commission has no jurisdiction over the Total contract
KHARTOUM 00000417 003 OF 003
because it was signed before the CPA.
¶12. (C) For its part, Total must overcome a lot of suspicion
in the south. In general, the French are not trusted in
Southern Sudan due to the perception of close ties to the
north and minimal involvement with reconstruction in the
south. The French are also largely blamed for the Jonglei
canal because the contractor building the canal was French.
Many in the SPLA believe the French supported the north
during the war and provided satellite data to northern forces
in exchange for Carlos the Jackal.
¶13. (C) Total has started to reach out to the south and has
had meetings with Kiir, who was positive and speculated that
a compromise could be worked out. An official for Total,
however, told CG Juba that executives in Paris still favor
close alignment with the North. The North has attempted to
prevent Total contacts with the GoSS. GNU Vice President Ali
Osman Taha has reportedly assured Total executives that he
could solve the problem.
¶14. (C) Despite these efforts, Total has faced difficulties
in both the north and the south. In the south, the GoSS has
denied them access to Bor, while in the North they have had
trouble getting flight clearances (Note: Petronas and other
oil companies are permitted to fly without prior
notification). Total has also been forced to hire the nephew
of GNU Minister of Energy and Mines Al Jaz. The Total
official said his strongest northern ally is GNU Minister of
International Cooperation Tijani al Faidal, the former
Ambassador to France. The Total official also said unnamed
government security forces offered to clear the Bor area, an
offer Total declined.
¶15. (U) For a variety of reasons, we should continue to
track this issue:
— (SBU) The Total-led consortium includes a reputable U.S.
company (Marathon) that has made a significant investment.
— (SBU) Failure of the GOSS to undertake transparent and
fair public tenders will damage donor and investor confidence.
— (SBU) GoSS failures to honor CPA commitments could
jeopardize long-term peace and reconciliation.
— (C) The involvement of GoSS Vice President Machar and his
wife, State Minister Teny, bears watching because of issues
regarding conflicts of interest and the potential for
corruption at the highest levels of government