Sudan and India to continue energy sector ties

Dec 09, 2003 01:00 AM

In yet another major tie-up in the oil sector with Sudan, India will set up two projects estimated to cost $ 750 mm for expansion of an oil refinery and laying of a petroleum products pipeline in that country. In addition, equity participation of Indian oil companies in two more oil and gas exploration blocks are expected to be finalised by next month. India is already a partner in Sudan's Greater Nile Oil Project along with Malaysia and China which gives it an assured supply of 3 mm tons of oil from this oilfield.
These decisions were taken at a meeting between the visiting Sudan Energy and Mines Minister, Awad Ahmed El Jazz, and Petroleum Minister, Ram Naik, who also constituted a Joint Working Group to review cooperation in the hydrocarbons sector. According to Mr Naik, Sudan agreed to give the projects to a consortium of public sector oil companies led by ONGC Videsh Limited (OVL) on a nomination basis, rather than going through the competitive bidding process.

The Sudan Minister, Mr Awad, said several companies had made offers for implementing these two projects but his country was seeking to involve India in a larger way in the hydrocarbons sector in his country. It was likely to become one of the world's largest oil exporting countries in the near future, he said.
Mr Naik told that the two projects identified were the Port Sudan oil refinery expansion and redevelopment project and the 740 km long Khartoum-Port Sudan petroleum products pipeline. OVL will have the highest equity share of 50 %, followed by 25 % by Engineers India, 15 % by Indian Oil Corporation and 10 % by Oil India.

Official sources said that in the case of two other oil exploration blocks -- 5A and 5B -- being pursued by OVL, the equity stake was likely to be 25 % each for the Indian company. OVL's collaboration in these two blocks is likely to be finalised by next month when the next meeting of the JWG is held in Khartoum.
Regarding the Greater Nile Oil Project, Mr Naik pointed out that India now had an assured supply source for 3 mm tons of oil. But with annual production from the GNOP expected to rise from 12 mm tons to 15 mm tpy, this amount was likely to progressively go up, he said.

Asked about the disinvestment of Indian Oil Corporation (IOC), he said the Petroleum Ministry had only prepared a factual paper for the Disinvestment Ministry which would have to initiate action on the various proposals for privatisation of the oil sector. He also clarified that Shell had been given approval in principle' for setting up retail outlets in the country.
The final clearance, however, was subject to Shell providing details of the mandatory investment of Rs 2000 crores required to be made before oil companies could enter the marketing arena.

Source: Neftegaz.RU
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