Austria’s OMV pulls out of Sudan
By Julia Ferguson
VIENNA, Sept 2 (Reuters) – Austrian oil group OMV on Tuesday became the latest Western firm to divest from war-riven Sudan following strong criticism from human rights groups.
Austria’s largest industrial group said it had sold its stakes in two exploration blocks to India’s Oil and Natural Gas Corp ONGC for around $115 million.
OMV is now the third Western firm in a year to sell a stake in Sudan to a state-owned Asian company less vulnerable to human rights pressure.
Sweden’s Lundin Petroleum AB and Canada’s Talisman Energy Inc have also divested from Sudan, selling to Malaysia’s Petronas and ONGC, respectively.
Human rights groups say that by investing in Sudan’s petroleum resources, oil companies have helped fund the government’s civil war effort in a 20-year conflict that has claimed two million lives.
The civil war in Africa’s biggest country erupted in 1983 and pits the Islamic government in the north against rebels seeking more autonomy in the mostly Christian or animist south.
For the past year the warring factions have been trying to negotiate an end to the conflict but remain at odds over how to carve up the country’s power and wealth, including oil reserves estimated between 600 million and 1.4 billion barrels.
OMV said it had obtained a good price for its Sudanese assets — blocks 5A and 5B located in the Muglad Basin some 700 km (440 miles) south-west of the capital Khartoum.
“The proceeds will now be invested in the further expansion of our oil and gas production,” said Helmut Langanger, OMV board of management member in charge of exploration and production.
“Even when taking the long-term exploration and production potential as well as the continuing peace process in this country into consideration, the sale of our Sudanese interests is the right decision for us,” he added.
In May, Langanger told Reuters OMV had no plans to abandon or reduce its holdings in Sudan since “these are attractive assets.”
OMV was a junior partner in the two blocks with Malaysia’s Petronas, Sudan’s Sudapet and IPC Sudan Ltd.
OMV had a 26.125 percent working interest in block 5A, containing the undeveloped Thar Jath field, and a 24.5 percent working interest in block 5B.
The contracts were signed with ONGC earlier on Tuesday and take commercial effect from January 1.
The deal still needs the blessing of the Sudanese government as well as contractual rights of consortium partners, which OMV said it expected to obtain within the next few months