Moldova’s Ascom probes Petronas Sudan oil block
Oct 11, 2005 (DUBAI) — Moldovan oil firm Ascom Group SA is exploring acreage in southern Sudan claimed by a consortium led by Malaysia’s Petronas (PET.YY), one of the largest foreign investors in the impoverished African state.
Radu Constantin, the firm’s exploration manager, said Ascom signed a production-sharing agreement with the southern Sudanese authorities in June. The Chisinau-based firm plans to start drilling early next year after collecting seismic data on block 5b, which the foreign arm of Malaysian major, Petroliam Nasional Bhd, or Petronas, is also trying to develop.
“We know this to be a very low-risk block,” he told Dow Jones Newswires, without elaborating on estimates of future output.
Ascom, like the U.K.’s White Nile Ltd. (WNL.LN), is operating with the protection of southern Sudanese leaders keen to develop a domestic oil industry independent of the central government in Khartoum.White Nile is working in the huge Block Ba, part of a larger area claimed by a Total (TOT)-led consortium, triggering a potential legal dispute with the French company.
The Moldovan firm, with assets in Kazakhstan and Turkmenistan, may also face a challenge from the Petronas consortium, which signed with Khartoum years before January’s peace deal that ended decades of civil war.
“As far as Petronas is concerned, we are the legitimate operator of Block 5b, as per the exploration and production sharing agreement signed with the government of Sudan in 2001,” said Petronas spokesman Azman Ibrahim.
Ascom’s Constantin said he had yet to receive any word from Petronas.
“But Petronas have very big interests in southern Sudan, so I don’t think they will want to quarrel with the authorities,” he said.
Canada’s Terra Seis Geophysical Ltd. is conducting the seismic work for both Ascom and White Nile. An executive from the oil exploration services firm’s Maltese office said these areas of southern Sudan were widely believed to be rich in oil.
“Initial results confirm this and even go beyond expectations,” he said of blocks 5b, the area claimed by both Ascom and Petronas, and Ba, the stake being explored by White Nile, but claimed by Total.
Petronas has equity in several other Sudanese blocks, including the Muglad basin area that accounts for most of Sudan’s current oil production of 350,000 barrels a day.
Block 5b is 41% owned by Petronas, with Swedish-owned Lundin Petroleum (LUPE.SK) and state-owned ONGC Videsh Ltd., the foreign arm of India’s Oil & Natural Gas Corp. (500312.BY), each holding 24.5%, with 10% for Sudapet, Khartoum’s state-owned company.
Lundin estimates the block could hold between 500 million and 1 billion barrels of oil. Chevron Corp. (CVX) pulled out of the area in the 1980s because of the civil war, which pitted the largely Arab north against the non-Muslim African south.
Ascom says its production sharing agreement is with Nile Petroleum Corp., the company owned by the south’s government-in-formation, which is also in partnership with White Nile to develop Block Ba.
Total has also said it plans to start operations in Block Ba, where White Nile, founded by cricketer Phil Edmonds and mining entrepreneur Andrew Groves, has set up a base camp.
Under the comprehensive peace agreement, contracts in place before the signing in January can’t be revoked. The peace deal gives the former southern rebel army significant autonomy, a presence in the central government in Khartoum and a share of the south’s oil revenues.
Total, along with partners Marathon Oil Corp. (MRO) and Kuwait Petroleum Corp. (KPT.YY), says it has legal rights to the block, as the consortium renewed its agreement with Khartoum in December, before the signing of the peace treaty.
The southern authorities say that Nile Petroleum Corp. was formed in August 2004, making it a pre-existing contract, while White Nile points to the fact that it is operating in areas under southern control.
(Dow Jones)