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India oil company demands $418m from Sudan

May 16, 2017 at 3:39 pm

Oil tankers seen at the Al-Basra Oil Terminal in Iraq, 16 May 2017 [Samuel W. Shavers/Wikipedia]

The Indian petroleum corporation exploring oil in Sudan says the Sudanese government owes it company $418 million in unpaid dues following the decision not to extend its licence to operate in one of the concession area, reports Business Standard website.

The Oil and Natural Gas Corporation (ONGC) Videsh Limited, owned by OVL, which has a 25 per cent stake in the Greater Nile Petroleum Operation Consortium (GNPOC), had its contract to operate Block 2B oil field terminated in November last year having been unable to agree a new deal with the Sudanese government.

The company was seeking an extension of 15 years but could not meet Khartoum’s demands for higher royalties, tax and a greater share of profits. The Sudanese petroleum industry was heavily affected by the drop in the price of crude oil.

Read: Sudan calls for South Sudan to pay oil arrears

Managing Director, Narenda K Verma, expressed his disappointment:

We were hoping to get the extension but the government of Sudan chose not though we had offered our best work programme and investment commitments to bring out production at higher levels along with our consortium partners.

In 2003, ONGC purchased a stake in the Greater Nile Oil Project comprising blocks 1, 2 and 4 in Sudan. After South Sudan separated from Sudan in 2011, the reserves were split between the two countries. All the blocks of South Sudan in which ONGC has stakes have been closed for about three years due to security issues.

In the meantime, the state oil companies of Sudan have been operating the 2B block. ONGC has stakes in two more producing blocks in Sudan, where the licence to operate will run till 2021-22. ONGC’s share in output from these blocks is 6,000-7,000 barrels per day.