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Peaceful Sudan set to be major oil producer

NAIROBI, July 4, 2005 (The East African) — With production levels reaching 500,000 barrels a day this year, Sudan is the oil industry’s best-kept secret.

 

The country holds enormous potential, especially for new entrants looking for existing new exploration and development prospects.

 

Since the official signing of the Nairobi peace agreement in January, India’s Videocon has signed a memorandum of understanding with the government of Khartoum province in Sudan to invest and develop oil projects.

 

Videocon Industries will be investing $100 million for a 76 per cent stake in an oilfield in Sudan.

 

Further, Khartoum has signed a $400 million deal with White Nile Petroleum to develop its southern Thar Jath oil fields to an initial capacity of 80,000 barrels per day by the end of March 2006.

 

The reserves of the Thar Jath oilfields, in the southern Unity state, have been estimated at a minimum of 250 million barrels.

 

White Nile Petroleum Company is a consortium of Malaysian state oil firm Petronas, India’s state-run Oil and Natural Gas Corp, and Sudan’s state oil company Sudapet.

 

Recently, Total SA, Marathon Oil Corporation, and the Kuwait Foreign Petroleum Company renewed their exploration rights in southern Sudan.

 

Sudan has proven reserves of 563 million barrels of oil, more than twice the 262 million barrels estimated in 2001. Because much of Sudanese oil exploration has been limited to the central and south-central regions, Sudanese Energy Ministry representatives estimate proven reserves at 700 million barrels and total reserves at five billion barrels, including potential reserves in northwest Sudan, the Blue Nile Basin, and the Red Sea area in eastern Sudan.

 

Oil production has risen steadily since the completion of an export pipeline in July 1999. Crude oil production averaged 343,000 barrels per day in 2004, up from 270,000 in 2003.

 

In December last year, Sudanese Energy Minister Awad al-Jaz announced that oil production is likely to increase to 500,000 barrels per day this year and is expected to reach 750,000 barrels per day by late 2006.

 

Chinese, Swedish and Indian companies are currently operating and exploring in Sudan.

 

Current activity is centred in the south and on the Myalad basin.

 

Heglug and Unity fields are in production and recent discovery at Diffra West 1 shows that there still remain much future potential.

 

In addition, two junior Canadian resources companies are quietly pursuing oil exploration opportunities in the country- Vancouver-based Vangold Resources and Calgary-based Panterra Resources.

 

Speaking to Vangold’s CEO Dal Brynelsen, or the CEO of Panterra Resources, Giuliano Tamburrino, one gets the impression that Sudan’s potential reserves will far exceed Saudi Arabia’s.

 

In an interview with The EastAfrican, Mr Tamburrino said that the Khartoum government had created an enabling environment for junior resource companies to undertake successful exploration programs.

 

Vangold Resources recently optioned various copper and nickel exploration projects in Uganda.

 

On his part, Mr Brynelsen said that after completing the initial first exploration program, the company will identify joint venture partners to develop both the projects in Uganda and Sudan.

 

Sudan is the largest country in Africa, with an area of 2.5 million square kilometres and borders nine sovereign states.

 

Oil exploration in Sudan began in 1959 and was originally concentrated on the Red Sea continental shelf.

 

Agip started oil exploration in early 1959 at Red Sea offshore but abandoned the venture.

 

Chevron Oil Company started prospecting in 1974 and discovered vast deposits in 1978.

 

Chevron discovered oil in two basins, which it named Muglad and Melut in Western Upper Nile and North Eastern Upper Nile respectively.

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