Sudan assigns Chinese CNPC offshore oil block

July 28, 2007 (Beijing) — Sudan has signed a deal with Chinese state oil firm China National Petroleum Corp. (CNPC) to take a majority stake in its Block 13 exploration site, off the coast of the Red Sea, a senior Sudanese oil official said on Friday.

CNPC has a 40 percent stake, 15 percent for both Indonesian state firm and Sudanese state oil firm Sudapet.

Nigeria’s Express and AfricaEnergy firms and Sudanese Dindir Petroleum International will each take 10 percent.

The 38,200 square kilometre block will require an initial exploration investment of $25 million in the first three years, the official, who declined to be named, told Reuters.

Three wells were drilled in the block by Italian oil company Agip which began work in the area in 1959 and “oil and gas shows” were found, the official said, adding they were not commercial.

Sudan’s National Petroleum Commission approved the deal, which was signed at the end of June.

That leaves just two current blocks still to be assigned in Sudan. Block 12b covers the war-torn western Darfur region and the eastern Block 10.

But many of Sudan’s blocks are very large and the official said most contracts contained a clause that the controlling consortium had to relinquish a percentage of the block area within a specific time frame.

Sudan’s oil industry, developed despite U.S. sanctions with investment by Asian firms from China and Malaysia, has lacked transparency because of its role in the north-south civil war, Africa’s longest.

With a January 2005 deal, around 50 percent of the revenues from oil in Sudan’s south — which contains two of the largest oilfields, goes to a newly created southern government.

The official said oil contracts remained confidential.

Under the deal south Sudan can vote on a referendum by 2011 to separate from the north.

Sudan produces about 500,000 barrels per day (bpd) of crude, mostly the sweet Nile Blend and the newer acidic Dar Blend.

(Reuters)