Sudan offers India more oil exploration blocks, refinery project

Dec 5, 2005 (NEW DELHI) — Sudan has invited India to participate in three more oil exploration blocks and undertake a refinery project, even as ONGC Videsh Ltd (OVL) is set to receive more equity oil from the north African country in April.

Sudan’s Energy and Mining Minister Awad Ahmad al-Jaz said the additional oil would come from two blocks in which India’s state-owned OVL holds stakes and which are expected to start production soon.

“By April, one block is expected to start oil production. Initially it will be around 40,000 barrels per day (bpd), which will later go up to 60,000 bpd,” al-Jaz told Indo-Asian News Service (IANS) in an interview.

“The preliminary seismic survey in the second block has also started,” he said.

OVL, the overseas arm of the Oil and Natural Gas Corporation, holds stakes of 24.12 percent and 23.5 percent in two blocks in Sudan, the largest African nation and also home to one of the biggest oil reserves in that region.

India currently gets around three million tonnes of oil from Sudan for the 25 percent equity stake held by OVL in the Greater Nile Oil Project – in which China and Malaysia also have stakes. The project produces around 12 million tonnes oil a year.

Declining to give details of the estimated reserves in the block where production will start by April, al-Jaz said currently only a small portion of the large block has been explored.

In India at the invitation of the ONGC to attend an oil and gas conference in Jaipur, al-Jaz, during a meeting with Petroleum Minister Mani Shankar Aiyar, sought the country’s participation in more exploration blocks in Sudan being offered for bidding.

Sudan is keen to have OVL participation in block 13, for which the Indian company had not bid earlier, as also two new blocks – 12B in the western part of the country and 10 in the east.

Happy with the ONGC’s early completion of a 741-km petroleum products pipeline, which is to be commissioned Dec 10, al-Jaz expressed the hope that the Indian energy major would participate in more projects in Sudan.

“There is still a chance for the ONGC to participate in more exploration blocks including in 12A, which they had bid for but did not get. They can try for a share in the block from the current stakeholders,” he said.

“We have just opened the bids for two blocks – 12A and 13 – which have been won by consortiums including Reliance. So there is an Indian involvement in these blocks.

“We have started receiving applications for the two new blocks (12B and 10) and hope to open the bids possibly in February,” he said.

“We have other projects in which we would like ONGC participation. This includes a refinery project. While a new refinery at Port Sudan has been built by the Malaysians, there is another refinery planned south of Khartoum. We are waiting for the ONGC offer,” al-Jaz said.

OVL was earlier considered for building the $1.2-billion oil refinery at Port Sudan. Though the current refinery capacity in Sudan is sufficient for domestic consumption, the African nation is keen to tap export opportunities.

Sudan currently exports two-thirds of its estimated 500,000 bpd of oil production, which is slated to rise to over 600,000 bpd by next year.

“We are looking at another export-oriented refinery of a minimum 100,000-bpd capacity. We have offers from some companies in the Gulf but if the ONGC shows interest we would wait for the offer,” al-Jaz said.

Expressing hope of getting the ONGC proposal in a month’s time, he assured of an early decision.

Sudan is also looking forward to state-owned Bharat Heavy Electricals Ltd (BHEL) starting work on a 500-MW thermal power project for which financial negotiations have been completed.

The estimated $300-500 million project is awaiting the Indian government’s go-ahead, the minister said.

Over the past few months since the signing of a peace accord in Sudan, al-Jaz said there had been considerable flow of investment from India with companies undertaking rehabilitation and upgrading of textile mills and railway stations among other projects.

“We are hopeful the Indian petroleum minister will visit Sudan around March, when he has promised to bring a diverse delegation representing different sectors,” he said.

(IANS)