Sudan Prefers to Remain Out of the Oil Cartel
Sudan still studying the possibility of joining the oil cartel but for the time being prefers to be content with its observer status, a minister said.
Sudan is taking part in the OPEC’s meetings as an observer since 2004.
The newly appointed Sudan’s minister of Energy and Mining told Platts commodity news from Vienna where he participates in a meeting of the Organisation of the Petroleum Exporting Countries (OPEC) that Sudan will maintain his status as an observer in the oil cartel.
"Now our decision is to remain an observer, But in the future we will study this," said al-Zubair Ahmed Al-Hassan.
Sudan was invited to join the OPEC in May 2006 by Nigeria in its capacity as chairman of OPEC at that time. Since, the issue also was raised several times by the oil cartel to enlarge its influence on the oil market.
However with 500,000 b/d of production the small oil exporter country considers that the oil cartel would impose quotas and hinder its oil development projects.
"Sudan’s oil is being produced under the typical sharing agreements, whereby foreign companies invest and then recover their spending though what is called cost oil." Said Alsir Sidamed a Sudanese analyst in a paper he wrote last year to Sudan Tribune.
"The only oil left to cut from to satisfy OPEC requirements is what is called profit oil, or the share split by the government and companies as profit." He added.
OPEC controls more than a third of world oil supply and sets production quotas among its members to influence world petroleum prices.
Also, joining the OPEC at this stage can slow investment by foreign oil companies in the country because investors would be subject to supply cuts imposed by the cartel; while Sudan relies heavily on foreign oil investment to develop the sector.
The Sudanese minister said that Sudan has 6 billion barrels of reserves. This reserves figure was expected to grow, he said.
"We have many blocks which are under consideration, both offshore and onshore," he said.
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