Oil from Sudan likely for setting up $240 million pipeline

Tuesday, 30 September 2003, 07:00 Hrs
Printer Print Email Email
NEW DELHI: India has bagged a $240 million contract from Sudan for setting up a 700 km petroleum pipeline from Khartoum Refinery to the Port of Sudan, which will fetch it equity oil and cash.

"The contract has been awarded to us on a nomination basis," Oil and Natural Gas Corporation (ONGC) chairman and managing director Subir Raha said here Monday during a media interaction following the annual general meeting.

Giving details of the deal, to be finalised soon, ONGC Videsh Ltd (OVL) managing director Atul Chandra said this is the first pipeline service provider contract the company has bagged in Sudan.

"We plan to undertake the project as a consortium with ONGC and OVL as lead partners with 50 percent equity, Engineers India Ltd (EIL) 20 percent and both Indian Oil Corporation (IndianOil) and Oil India Ltd (OIL) holding 15 percent stakes each," Chandra told media on the sidelines.

The project is to be completed by early 2005, and India will begin to receive oil and cash returns after one year of the product pipeline becoming operational.

The terms of return on the investment by the Indian consortium of state-owned companies are still to be finalised.

"We expect the repayment in oil or cash to be spread over nine to 10 years. India could expect to receive around two shipments of 600,000 barrels of oil each every six months," said Chandra.

Earlier this month, OVL bought the equity stake Austia's OMV Aktiengesellschaft in two onshore exploration blocks in Sudan in a $115 million deal.

The exploration blocks 5A & 5B in which OMV Aktiengesellschaft had 26.12 percent and 24.5 percent stakes respectively, are located in the Muglad basin. They are adjacent to the Greater Nile Oil Project, where OVL acquired 25 percent stake in March this year from Canada's Talisman Energy Inc.

In block 5A, OVL will be partnering Malaysian national oil company Petronas and Sudanese national oil company Sudapet. In the exploration block 5B, OVL partners Petronas and the Swedish oil company Lundin Petroleum AB along with other partners. Currently drilling of the exploratory well TharJath-3 is in progress in Block 5A.

The wholly-owned subsidiary of ONGC is looking at building up its investment in Sudan to yield around eight million tonnes of oil annually, up from an estimated 3.2 million tonnes currently.

"As against 3.2 million tonnes we are receiving as our share from the Greater Nile Project, we expect to get around 3.75 million tonnes next year as the production is stepped up. In blocks 5A&5B, while the current in place reserves are estimated to be one billion barrels, the expectations are that it will go up to four billion barrels by 2008-09, equal to ONGC's in place reserves in India, considerably boosting our share of equity oil," said Chandra.

Targeting 20 million tonnes per annum of oil and oil equivalent gas from overseas properties by 2010, OVL is hopeful of reaching its objective much ahead of schedule. It currently has 10 properties in eight countries including Sakhalin-I project in Russia, Vietnam Block 06.1 field, Greater Nile Oil Project in Sudan as well as exploration blocks in Iran, Iraq, Syria, Libya and Myanmar.

The company is now looking at acquiring assets in Saudi Arabia, where it has been accorded the status of an independent operator for its technical competence and would be participating in the bidding rounds for stake in three exploration blocks.

"We are also looking at opportunities in Africa. We are already in Libya and are looking at Angola as part of the relation building exercise between the two countries. In Libya, we are looking for two more blocks in addition to the two blocks we have acquired stake in," said Chandra.

Under a farm-out agreement with Turkish Petroleum Overseas Company, OVL has 41 percent stake in two on-land oil and gas exploration blocks in Libya.

In Block No.188, the spudding of oil well will begin in the last week of October, while in the second block No.189 the location of the well is being finalised.

OVL is also studying three more offshore blocks in Myanmar, three blocks in Iran in consortium with state-owned oil and gas majors as part of a composite proposal for exploration and development of oil and gas infrastructure, and also in Australia.

Source: IANS
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..
SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..