Sudan reluctant to join OPEC

Oct 29, 2007 01:00 AM

Sudan, Africa's fifth-largest holder of oil reserves, is reluctant to join the Organization of Petroleum Exporting Countries as the group seeks to expand its membership among emerging African states, an official said.
"Once you join OPEC you are considered a rich nation and this may put some burden on Sudan," Omer Mohamed Kheir, Secretary-General of the Ministry of Energy & Mining told from his office in Khartoum.

OPEC, which pumps 40% of the world's oil, is growing its membership as it seeks a greater share of worldwide supply. The 12-member group admitted Angola last year and is expected to approve the membership of Ecuador at the heads-of-state meeting in Riyadh.
Sudanese officials had held talks with OPEC last year about the possibility of joining the cartel, which helps set world oil prices by adjusting the amount of crude its members supply to the market.

On the New York Mercantile Exchange, light sweet crude for December delivery traded at $ 93.01 a barrel. Oil is trading at new records amid concern over OPEC supply, geopolitics and refinery shortages. At present Sudan, Africa's largest country, produces about 515,000 bpd of crude oil, much of which is processed in its Khartoum and West Kordofan refineries, according to Kheir.
"Our production is not much and we need our oil resources for our own development," Kheir said.

At current levels Sudan would be OPEC's smallest producer. Sudan's current reserves are estimated at 5 bn barrels but the government expects the number to increase, Kheir confirmed.
"From the geological information and technical data we have we expect to discover more oil. It's difficult to say how much until we start drilling but we are exploring and we are expecting a lot more," Kheir said. He added if no more oil was discovered in the next couple of years production would still remain around the 500,000 bpd mark.

New refinery
Kheir said, Sudan's oldest oil refinery will be brought back into production and become the country's major oilprocessor by 2009.
"We are now cooperating with Malaysia's Petronas to build a new refinery in Port Sudan incorporating the old refinery to produce an extra 175,000 bpd," he said.

The Port Sudan Refinery, which was commissioned in 1964, is expected to start operations by mid to late 2009. In 2005, the government and Petroliam Nasional, or Petronas, signed a $ 1 bn contract to build a 100,000 bpd plant in Port Sudan. About 100,000 bpd are processed in the Khartoum Refinery and 15,000 bpd in the Al Obeid Refinery.
Sudan produces three main types of crude including the sweet, light Nile Blend found both in the North and south of the country and heavier low sulphur crudes Dar and Fula. About 50% of Sudanese oil is Nile Blend which is popular in China and can fetch up to $ 80 a barrel.

Darfur threat
Kheir dismissed concerns about security of oil facilities and oil workers after Darfur rebels attacked installations and kidnapped oil workers.
"Sudan is very big and there are certain areas where we have some security problems but more than 90% of the country is safe," he said. Two foreign oil workers were taken hostage but "no one was killed according to my own information," Kheir said.

Hostility is brewing in Sudan towards foreign oil workers, who now account for about 20% of the industry's workforce, as prices in the country rise for basic services and housing.
Sudan's oil industry may fall victim to the violence in Darfur, where rebels have been fighting government forces since 2003 in a bitter campaign.

Source / Dow Jones Newswires
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