Total renews oil licence in disputed Western Sahara

LONDON Fri Feb 7, 2014 11:31am EST

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LONDON Feb 7 (Reuters) - Total has renewed its licence to explore off the coast of disputed Western Sahara, where its oil hunt has angered independence activists and pushed a Norwegian investor to withdraw its money from the French energy company.

Morocco has issued licences for blocks in the Atlantic waters off Western Sahara, a desert tract that it mostly controls but which is also claimed by an Algerian-backed independence movement that deems those contracts illegal.

Total's activities and plans by U.S. explorer Kosmos Energy to sink a discovery well this year have brought one of Africa's oldest territorial disputes back into focus.

Total said on Friday it had extended for a third year its reconnaissance licence for the 100,000-square-kilometre Anzarane block, which was first issued by Morocco in December 2011.

Total told Reuters in an emailed response to questions that it had renewed the licence "in order to complete the treatment and the interpretation of the seismic data acquired in 2013".

Since obtaining the reconnaissance licence, Total has conducted geological, seabed and 3D seismic studies but has not announced any plans to drill an exploration well, which would require it to sign a separate contract with Morocco.

Morocco, Total and Kosmos have all pledged to abide by international standards and a U.N. legal opinion requiring them to consult local people on their activities.

But advocates of self-determination for the region's Saharawi people say the oil hunt only cements Moroccan control and undermines U.N. efforts to reach a lasting settlement.

Morocco annexed Western Sahara in 1975 after colonial power Spain withdrew, and fought a war with an Algerian-backed independence movement. In 1991, a U.N.-brokered ceasefire was reached on the understanding that a referendum would be held on the region's fate. That vote never took place.

Concerns over the conflict led Norwegian life insurance firm KLP to pull its 400 million krone ($64.7 million) investment in Total in June, according to its website.

In making its decision, KLP referred to the findings of the much larger Norwegian government pension fund, which withdrew its holdings in U.S. explorer Kerr-McGee in 2005, explicitly because if its involvement in Western Sahara.

Kerr-McGee let its Western Sahara permit expire in 2006.

Total, which first won a licence for its Western Sahara block in 2001, initially let it lapse in 2004.

Erik Hagen, of Western Sahara Resource Watch, which has lobbied investors to take a stand in the past, says it will push for further divestment.

Total said no other divestment has taken place to date.

"To our knowledge, only KLP ... divested ... while admitting that Total was not violating international law," it said.

"Total is at the disposal of its investors to explain its activities in this part of the world." (Reporting by Lin Noueihed; editing by Jason Neely)

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