Sudan signs deals with foreign oil firms

05/07/2012| IslamWeb

Sudan has signed exploration deals with several foreign petroleum companies, an official said on Wednesday, as a dispute over oil fees from South Sudan remains unresolved.

Sudan inked the exploration and production-sharing agreements on Tuesday with companies from Australia, Brazil, Canada, Egypt, France-Belgium and Nigeria, Azhari Abdalla, director general of the government's Oil Exploration and Production Authority, told AFP.

He said the contracts apply to five of the six blocks, in various parts of the country, offered in January. Only a block in the strife-torn Darfur region failed to gain a contract.

State-owned oil and gas firm Sudapet is also a party to the deals.

Sudan has lost billions of dollars in oil receipts since South Sudan gained independence last July, taking with it about 75 percent of Sudanese crude production.

The north has been left struggling for revenue, plagued by inflation, and with a severe shortage of dollars to pay for imports.
The landlocked South depended on the north's pipeline and port to export its crude, but Khartoum and Juba have not been able to agree on how much South Sudan should pay to use the infrastructure.

Finance Minister Ali Mahmud al-Rasul said in May that the lost pipeline fees amounted to 6.5 billion Sudanese pounds ($1.48 billion).

Sudan's already depleted oil revenues shrank by a further 20 percent after its main Heglig oil field was damaged and shut down in fighting with invading South Sudanese troops in April, an international economist has estimated.

Abdalla said the companies will spend a minimum of "something close to half a billion" dollars in total and must meet targets including a certain number of wildcat wells during the two-decade contracts.

Of more than 70 firms represented months ago when the bidding round began, 23 followed up by examining data on the blocks, some of which already have proven discoveries, Abdalla added.

Sudan last month began phasing out fuel subsidies as part of government austerity measures.

Rising prices have led to an unprecedented series of anti-regime demonstrations.

PHOTO CAPTION

Sudanese workers at the Heglig oil facility, May 2012.

AFP