OVL in talks to acquire stakes in 2 Sudanese oil blocks

OVL in talks to acquire stakes in 2 Sudanese oil blocks

New Delhi: ONGC Videsh Ltd, the overseas arm of state-run Oil and Natural Gas Corp (ONGC), is in talks to acquire stakes in two oil blocks in Sudan, a nation which is the Indian flagships largest overseas oil producing base.

“OVL is present in three blocks in Sudan and is on the way of joining a fourth one. It is also applying for a fifth and possibly a six property," Sudans Energy Minister Awad Ahmed al-Jaz told reporters after meeting Petroleum Minister Murli Deora on the sidelines of the India-Africa Hydrocarbon Conference.

The Indian flagship is seeking a 30% stake from Petronas of Malaysia in the 65,856 sq km Block 8 in Blue Nile Basin, northeast of Sudans highly prolific Melut Basin. Petronas Carigali Overseas has a 77% interest in the block, while the remaining equity is shared between Sudan’s national oil company Sudapet (15%) and High Tech Group (8%).

OVL managing director R. S. Butola said the company had also shown interest in taking the unallocated 32.5% stake in Block B where Total of France is the operator. Total has 31-32% stake in the block that also has White Nile as a partner. However, 32.5% in the block is yet to be allocated to any firm.

Petronas had previously waived off its pre-emption rights to allow OVL buy Austrian firm OMVs stake in Block 5A and 5B in Sudan. OVL acquired OMVs 26.125% stake in exploration block 5A, and 24.5% stake in Block 5B for $115 million.

Petronas Carigali Overseas Sdn Bhd (Petronas) is the operator of Block 5A, while Sudan’s national oil company Sudapet has the remaining 5%. In Block 5B, Petronas has 41%, Sudapet 10% and Swedish oil firm Lundin Petroleum AB 24.5%.

Blocks 5A and 5B are located in the Muglad basin and are adjacent to the Greater Nile Oil Project (GNOP), where OVL has 25% stake. GNOP that comprises Block 1, 2 and 4, is currently producing 2,55,000 barrels of oil per day while Block 5A, that contains the undeveloped Thar Jath field with gross proven and probable oil reserves of 149.1 million barrels, is producing 25,000 barrels per day.

India currently gets 3.2 million tonnes of crude annually from OVL’s 25% equity in GNOP in Sudan.

New Delhi has been encouraging oil companies to take equity stake in oil fields abroad to reduce import dependence and attain energy security.

Block 5B is a large block of 20,119 sq km and is located in the Sudd swamp. Gravity and seismic interpretation show the Muglad rift basin extends into Block 5B and the structural style in the area is similar to the rest of the basin where over 1 billion barrels of oil have been discovered to date.