New Delhi: Canada’s Talisman Energy Inc., which had exited Sudan due to growing international pressure, is interested in getting back to the war-ravaged country, according to the African nation’s energy minister.
To avoid a backlash at home, Talisman had sold its 25% stake in Sudan’s Greater Nile Petroleum Operating Co. Ltd for $720 million (Rs3,355 crore) in 2003 to ONGC Videsh Ltd, the overseas arm of India’s state-run Oil and Natural Gas Corp. Ltd (ONGC).
The Greater Nile oil project is located in the Muglad Basin, around 700km south-west of Sudan’s capital, Khartoum.
“Talisman is now saying that they should have held the asset and are interested in coming back,” Angilina Jang Teny, Sudan’s state minister for energy and mining, told Mint during her recent visit to India on 8 December.
The internal conflict in Sudan is estimated to have killed nearly 300,000 people and displaced at least 2 million people, leading to international condemnation of energy firms working there.
Questions emailed to Talisman on Monday remained unanswered. A senior Indian government official, who did not want to be identified due to the sensitive nature of the issue, said: “Even as Sudan was designated as the state sponsor of terrorism by the United States, Coca-Cola and Pepsi were still very much present there. India never had a problem with Sudan. If Western firms are allowed to do business there, all this talk of human rights violations will cease to exist.”
Many western firms have quit Sudan’s energy sector as they feared the US could invoke the Alien Tort Claims Act, which allows “foreign victims of serious human rights abuse abroad to sue the perpetrators” in the US courts, according to the law.
ONGC Videsh, or OVL, has already invested $2.5 billion in Sudan. The other partners in the Greater Nile consortium are China National Petroleum Corp. (40%), Petronas Carigali Overseas Sdn Bhd (30%) and Sudan National Oil Co. (5%).
In May 2004, OVL acquired a 24.13% stake in Block 5A and a 23.5% stake in Block 5B, operated by White Nile (5B) Petroleum Operating Co. Ltd, from Austria’s OMV Aktiengesellschaft for $134 million.
Southern Sudan is scheduled to hold a referendum in early 2011 on whether to remain a part of the country or not. A vote in favour of separation would present an opportunity for energy firms as 85% of the nation’s hydrocarbon resources are in the south, while the north has the infrastructure. Sudan produces around 520,000 barrels of oil a day and is underexplored—of 22 blocks, three are yet to be explored.
Sudan is a difficult country to do business in, said Nikhil Hira, a partner at consulting firm Deloitte and Touche and based in Kenya.
“There is widespread corruption in Africa and the regulatory environment not strong,” he said. “However, once you start there it is not very tough doing business there. Finding hydrocarbons may hasten the development process in Sudan.”