France's Total In Talks To Enter Congo Oil Block - Sources

Total SA (TOT) is in talks to enter an oil block owned by South African companies in Eastern Congo, people familiar with the matter said this week as majors show renewed interest in the resources-rich African nation.

French oil giant Total is in discussions with South African companies SacOil Holdings Ltd. (SCL.JO) and DIG Oil for a stake in a block near Lake Albert in exchange for covering initial exploration costs, the people said.

The talks are focusing on a 35% stake in Bloc III "and a carry-through initial exploration" and "little cash upfront," one person said.

Total has already struck a deal to help develop acreage on the Ugandan side of Lake Albert in blocks operated by Tullow Oil PLC (TLW.LN). China National Offshore Oil Co. (CEO), or Cnooc, is also part of the Ugandan deal.

Total, which is already producing from blocks in the neighboring Congo, has made Africa one of its priorities.

Eni SpA (E) of Italy and Exxon Mobil Corp. (XOM) have also expressed interest in joining the acreage, the people said.

In addition, Eni has also held talks with Congo to enter Bloc IV, in the same area, which is currently unattributed, the people said.

Total, Eni and ExxonMobil declined to comment. SacOil didn't return a request for comment.

"A number of companies have expressed interest in entering the block," said Andrea Brown, the businesswoman who controls DIG Oil, formerly known as Divine Inspiration Group Pty Ltd. But "it is far too early in any of the discussions" to name any of the contenders, she said.

Brown said "the budget and work programme were approved [last month] with a 7,000 kilometers line airborne gravity and magnetic survey due to commence end of January."

SacOil and DIG Oil were among companies whose rights on Lake Albert blocks were sanctionned in a Congolese presidential decree earlier this year.

Soco International PLC (SIA.LN) and Dominion Petroleum Ltd (DPL.LN) have rights to another block in the area. And Caprikat Ltd. and Foxwhelp Ltd., linked to South African President Zuma's nephew Khulubuse Zuma, have two licences which Tullow has disputed.

-By Benoit Faucon, Dow Jones Newswires; [phone]; [e-mail]