Sudan offers ONGC Videsh three more oil gas blocks for exploration

The offer made by visiting Sudanese Oil Minister^[4] Mohamed Zayed Awad^[5] is part of the African nation's efforts to seek greater energy engagements with India, to which it owes $240 million in oil dues.

OVL, the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC), already has a 25 per cent stake in Greater Nile Oil Project (GNOP) in Sudan that produces about 50,000 barrels of oil per day.

"They have offered more oil blocks for exploration and asked for Indian companies' expertise to raise production from existing fields," Oil Minister Dharmendra Pradhan^[6] said after meeting Awad on sidelines of the 4th India-Africa Hydrocarbons Conference here.

Awad said Sudan has offered Blocks 8, 15 and 24 for exploration of oil and has asked OVL to consider buying a stake in producing Block 17. Block 17 currently produces 7,000 bpd of oil.

Pradhan said Sudan is also keen on Indian firms setting up a coastal refinery to meet not just local fuel demand but also export to other African nations.

"The issue of $240 million pending dues was also discussed and modalities are being worked out for that," he said.

Sudan has not paid OVL for the oil from GNOP it consumed. The cash-starved nation wants the Indian firm to raise output from the producing Block 17 and exploration areas offered and recoup the dues from it.

Star Oil is the operator of Block 17 with 66 per cent stake while the remaining is with Sudan's Sudapet.

Also discussed was renewal of licence for Block 2B, which is part of GNOP. The licence for the block expires in November and OVL and its partners China National Petroleum Company (40 per cent stake), Petronas of Malaysia (30 per cent) and Sudapet (5 per cent) want a 5-15 year extension.

OVL had in 2003 bought 25 per cent stake in GNOP which comprised of Block 1, 2 and 4 in the undivided Sudan. It lies in the prolific Muglad basin about 780 kms in the South-West of Khartoum, the capital of Sudan.

Upon secession of South Sudan from Sudan, Blocks 2A, 2B and 4N are in Sudan and Blocks 1A, 1B as well as 4S are in South Sudan.

Block 2B is producing 50,000 bpd of oil while Block 4 is under exploration phase.

The crude oil produced from oil field of GNOP, is transported through a 1504-km pipeline to Port Sudan at Red Sea.

Upon secession of South Sudan from Sudan in July 2011, the contract areas of Blocks 1, 2 and 4, spread over both the areas, were split with major share of production and reserves are now situated in the South Sudan.

Post secession, as the government of Sudan's share of total production from Sudan was not sufficient to meet requirements of local refineries, foreign firms were asked to sell their share of crude oil to it.

However, the payment of dues on account of crude oil purchased by government of Sudan has not been received, officials said, adding that OVL's share of the outstanding dues is about $ 240 million.

OVL's share of oil production from GNOP, Sudan, was 0.7 million tons in 2014-15.

OVL had along with state-owned Oil India Ltd constructed and financed a 741-km multi-product pipeline from Khartoum refinery to Port Sudan for $ 194 million. OVL's share of project cost was 90 per cent while the rest was borne by OIL.

The pipeline was handed over to government of Sudan in October 2005. The lump sum price, together with lease rent was to be given to OVL in 18 equal half yearly instalments effective from December 2005.

While the payment of 11 half-yearly instalments due till December, 2010 was received from the government of Sudan, remaining seven instalments due from June 30, 2011 to June 30, 2014, are yet to be released.

OVL, whose share of investment in the project was $ 158.01 million, has been following up for realisation of $ 98.94 million from government of Sudan at various levels.

References

1. ^{^} Sudan (www.bing.com)
2. ^{^} ONGC Videsh (www.bing.com)
3. ^{^} oil and gas blocks (www.bing.com)
4. ^{^} Oil Minister (www.bing.com)
5. ^{^} Zayed Awad (www.bing.com)
6. ^{^} Dharmendra Pradhan (www.bing.com)