Sudan inaugurates oil pipeline

May 31, 1999 02:00 AM

Sudan's president danced and workers cheered at the inauguration of a 1,000 mile pipeline that will allow this impoverished nation to exploit vast oil reserves long untapped because of war and politics.
The $ 3 bn investment in pipeline and refineries is expected to yield 150,000 bpd by the end of September, quickly increasing to at least 250,000 bpd.
Recoverable reserves in this isolated semi-desert area 435 miles south-west of the capital, Khartoum, are estimated at 627 mm barrels. The pipeline stretches from the Heglig-area oil fields in western Kordofan province to the port city of Bashaier on the Red Sea.
"It is not Saudi, but it is the first sizeable deposit in what may be a large hydrocarbon province," said Jim Buckee, CEO of Talisman Energy, based in Calgary, Canada.

The fields were discovered in 1982 by U.S.-based Chevron, but the company did not develop them and cited security reasons for eventually dumping the project.
In 1983, the largely Christian and animist south rebelled against the Islamic northern government in a civil war that has claimed 1.9 mm lives.
Talisman has invested $ 400 mm in the pipeline, and Buckee said the company is satisfied with government security.

President Omar el-Bashir, addressing 3,000 workers, villagers and dignitaries from Khartoum, spoke of outfoxing U.S. interests in Sudan by finally nearing completion on the oil project.
"The oil was always here, but ... it was in the hands of the American company - and the Americans said `We do not need this oil at this time,"' he said. When told to dig it out "for the benefit of the Sudanese people or we are bidding farewell," the Americans left, he said.
Bashir thanked the foreign oil companies investing in the project, including Chinese and Malaysian firms.
Energy Minister Awad al-Jazz said it will likely take about four years for Sudan to begin making money off the oil, given the high start-up expenses. However, his production estimates - at an initial 180,000 to 200,000 bpd - runslightly higher than those of the oil consortium.

Source: AP
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