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Sudan opens six blocks to bids

Jan 15 2012 15:33 AFP

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Khartoum - International oil companies gathered Sunday to study six exploration blocks that cash-strapped Sudan opened for bidding.

More than 150 foreign and local industry representatives as well as government officials met at a Khartoum hotel to begin a process expected to conclude in May when bid winners are announced.

"We are offering six blocks with very good potential," Minister of Petroleum Awad Ahmed Aljaz told the gathering, where potential bidders received an introductory briefing on each of the blocks, and on Sudan's oil industry.

But there was no mention that the country lost 75% of its oil production when South Sudan separated in July following an overwhelming vote after decades of civil war.

The vast majority of Khartoum's export earnings came from petroleum, leaving the government now scrambling for ways to bolster its finances.

"We welcome all companies from all nationalities without any strings attached," Aljaz said.

The briefing came one day before the latest scheduled talks between Sudan and South Sudan in Addis Ababa, the Ethiopian capital, aimed at resolving a fierce dispute over oil compensation fees.

Although most of Sudan's oil is produced in the south, for now it can only be exported via the north, and the two countries disagree over how much Juba should pay for using the north's pipeline and export infrastructure.

Sudan's current production is 115 000 barrels a day but plans are now going "full speed" to boost that by 65 000 barrels daily by year's end, said Azhari Abdalla, director general of the government's Oil Exploration and Production Authority.

Sudan is offering Blocks 14 and 18 bordering Egypt; Block 12B in the conflict-plagued Darfur region; Block 15, onshore and offshore along the Red Sea; and Blocks 8 and 10, south of Khartoum and in eastern Sudan.

Abdalla said exploration - which began offshore in the 1950s and onshore two decades later - has proven the country has "active petroleum systems... which are substantially underexplored."

Oil companies agreed the country is worth looking at.

"It's interesting potential," said Gregory Channon, a director of Statesman Resourcessud, a small firm listed on Canada's TSX Venture Exchange.

"It will take several years to get discoveries out of these areas, I'm sure."

A representative of an Asian-based oil firm, who declined to be identified, agreed Sudan "has quite (the) potential."

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