Govt launches diplomatic efforts for Sudan oil field

Government has launched top level diplomatic initiative to secure a Sudanese oil field where ONGC Videsh Ltd’s proposal to buy Canadian...

Government has launched top level diplomatic initiative to secure a Sudanese oil field where ONGC Videsh Ltd’s proposal to buy Canadian Talisman Energy’s 25 per cent stake for $720 million is facing problems from partners Petronas of Malaysia and China National Petroleum Corporation (CNPC) of China.

‘Government has taken appropriate (diplomatic) actions with Government of Republic of Sudan following Petronas and CNPC exercising their pre-emption rights to buy Talisman’s stake at the price agreed with OVL’, Petroleum Secretary B K Chaturvedi said.

The agreement for Greater Nile oil project has been referred to the Sudanese Government following the development, he said adding ‘it (Sudan Government) has time till January end to decide the fate of OVL’s investment proposal’.

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While Chaturvedi declined to give details of government’s diplomatic efforts, highly placed sources said Prime Minister Atal Bihari Vajpayee has written to Sudan President LT Gen Omar Hassan Ahmad el-Bashier.

The drop-dead date for deciding the pre-emption rights exercised by Petronas and CNPC is January 31, sources said adding as per the contract for Greater Nile oil project, the partners have the first right to buy if any of them decides to sell its stake.

Sources said the issue has been referred to the Sudan Government as the law of the land does not permit any foreign company to hold more than 40 per cent interest in any field. Petronas has 30 per cent stake in the 230,000 barrels a day project while CNPC has 40 per cent. The remaining is with Sudan’s national oil company Sudapest.

Since China National Petroleum Corporation already has 40 per cent stake in the field, it cannot any further increase its stake through buyout of other partners, sources said adding Petronas can, however, take 10 per cent shareholding of Talisman, leaving only 15 per cent for OVL.

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