Thursday, May 05, 2011
Knight Ridder/Tribune Business News
by Julius N. Uma, Sudan Tribune
All contracts for Indian stakes in south Sudan's oil wells and their entities within the semi-autonomous region will be honored after the latter's independence, a special envoy revealed last week.
Priscilla Joseph Kuch, according Indo-Asia News Service (IANS), made these assurances during a meeting she held with S.M Krishna, the Indian external affairs minister in the capital, Delhi.
South Sudan is due to become independent in July after its population overwhelmingly voted for separation during the January self-determination referendum. The plebiscite was a key part of Sudan's 2005 Comprehensive Peace Agreement (CPA), which ended over two decades of war between north and south of the country.
Also discussed, according to Vishnu Prakash, the ministry spokesperson, was India's hydrocarbon interests in the oil-rich South Sudan which, he added, was reportedly "consolidating" and taking stock of agreements in the sector. "Our understanding is that the agreements pertaining to India will be honored," Prakash reportedly told reporters.
Currently, according to IANS, India's ONGC Videsh Limited is said to have stakes in several wells in Sudan, with production reportedly standing at 160,000 barrels per day. Out of this, 100,000 barrels per day of production is reportedly from oil wells in South Sudan.
"OVL has already offered training and to go beyond the current level of engagement," Rajiv Shahare, the Indian external affairs ministry secretary reportedly revealed.
OVL is a company began operating in Sudan in 2003. It built the pipeline from Khartoum to Port Sudan. It has a 25% stake in Sudan's Greater Nile Oil Project, which produces 280,000 barrels of oil per day. It is looking to expand its reach in South Sudan.
Regarded as being among the biggest players in Sudan's oil sector, along with China and Malaysia, India reportedly made an initial investment of US$1 billion in the sector, which is said to have increased to US$2.5 billion.
Over the years India has reportedly extended a US$566 million line of credit, which includes building a 500 megawatt power plant. Bilateral trade between India and Sudan was about $1 billion in 2010.
In March this year, the Energy and Mining ministry in the Government of South Sudan and Petroliam Nasional Berhad (PETRONAS), a Malaysian-owned oil and gas company signed a two-year memorandum of understanding aimed at boosting mutual cooperation between the two parties.
The document, signed in South Sudan's capital, Juba, outlines the overall principles of cooperation in the oil and gas sector between the government and the Malaysian oil giants, creating an avenue exploiting existing business opportunities in the two regions.
Founded on August 14, 1974, PETRONAS is owned by the Malaysian government. Since its incorporation, the company has reportedly grown to be an integrated international oil and gas company with business interests in 35 countries.
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