India seeking more exploration blocks in Sudan
Lola Nayar (IANS)
Khartoum (Sudan), February 1, 2005
India is keenly looking to acquire more exploration blocks in Sudan where it has already got equity stakes in three concessions, including the Greater Nile Oil Project producing around 15 million tonne annually.
State-owned ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corp (ONGC), has already expressed interest in two of the exploration blocks that are to be awarded this year by Sudan.
The North African country consumes only 100,000 barrels per day (bpd) and exports most of the current oil production of over 300,000 bpd, mainly from the Greater Nile project, a joint venture in which India's OVL holds 25 per cent stake while the remaining is held by Chinese, Malaysian and Sudanese partners.
"Sudan plans to open the bids on Block 15 in the beginning of February. After that we will invite tender for Block 12. The award of contract for Block 15 may be done by mid-Feb," said Sudan Energy and Mining Minister Awad Ahmed Al-Jazz.
OVL is one of the bidders for the Blocks 12 and 15 along with Chinese and companies from other countries, the minister said.
Besides exploration, OVL has now entered the downstream sector in Sudan having undertaken the funding and construction of a 714-km petroleum products pipeline from Khartoum Refinery to Port Sudan on Red Sea.
"We have another Block 13, adjacent to Block 115, which would be offered later for bidding after Block 12," Al-Jazz.
Of the five more blocks that are to be offered for exploration, a few more may be offered this year, the minister said.
He expressed confidence in ONGC's capability of competing with other bidders for the blocks.
Targeting substantially raising exports, the minister said, "We expect that by coming August to start production in Block 7, which would bring in another 200,000 bpd initially. This would help to double our oil production to 500,000-600,000 bpd."
Currently negotiating three-month contracts for export of crude, "Sudan may be looking for long term contracts once our production hits 500,000-600,000 bpd by this yearend," Al-Jazz told IANS.
The minister revealed that India has been selected to help it construct a new refinery of five million tonne capacity with ONGC having promised to bring in the finances for the estimated $1 billion project.
"We hope to finalise in the next few weeks the contract with ONGC and then award the tenders for the EPC (engineering-production-construction) contract. We will then hold a celebration for the start of the refinery project," Al-Jazz said.
On the payback on investment by ONGC, the minister said: "We would give them the most strong guarantee to give them back the money in time. Maybe oil would be a collateral for that. The technical people on both sides are going to sit together and frame out the timeframe and type of return India could hope for this investment."
While declining to disclose any details, ONGC chairman and managing director Subir Raha said: "The terms of the contract being discussed assure us good returns."
© HT Media Ltd. 2004.