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      • Sudan signs oil, gas exploration deal in north east

Sudan signs oil, gas exploration deal in north east

KHARTOUM (Reuters) - Sudan signed a $30 million deal with small Finnish company Fenno Caledonian on Thursday to explore Block 10 in the north east of the country, a rocky area that might hold gas or crude oil, officials said.

 

Multiple civil wars and U.S. sanctions since 1997 have forced Sudan to look mostly to Asian companies to develop its budding oil sector, which produces about 470,000 barrels per day and hopes to reach 600,000 bpd in 2011.

 

Fenno Caledonian, a private firm registered in Scotland, said it would invest an initial $30 million in the exploration over the next three years through a local unit, Fenno Caledonian Gedaref.

 

"It will be geologically difficult but there are lots of things which will make it easy, like access to infrastructure," said founder Heikki Jutila, adding that the rocky intrusions from the nearby Ethiopian mountains would make seismic interpretation more difficult.

 

He said there may be gas or oil in the 83,183 square km block because the adjacent Block 8 had gas showings. The block is also along the railway and the pipeline route to Port Sudan and the refinery there.

 

"There's a sedimentary base which follows the same system as all the other bases in the southern Sudan so it's very likely that they have a system there that generates hydrocarbons," Jutila added.

 

His company will take an 85 percent and the state firm Sudapet will take 15 percent of the consortium's shares.

 

Most of Sudan's estimated 6 billion barrels of oil reserves lies in the war-ravaged south, which is likely to vote for secession in a January 9 referendum on independence from the north.

 

So the government is keen to promote oil exploration in the north.

 

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