OVL resumes crude oil production in Sudan

PRoduction at the Sudan unit was halted 15 months ago due to split of the Afrocan nation

ONGC Videsh Ltd (OVL), the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC), has resumed crude oil production from its oilfields in Sudan, which was halted 15 months ago due to split of the African nation.
    
In a major fillip to India's energy security efforts, OVL last month resumed crude oil production from South Sudan oilfields, company's Managing Director Dinesh K Sarraf said here.
    
OVL holds 24.125% stake in Block 5A and 25% in Block 1, 2 and 4 in Sudan. After the split of the African nation, Block 5A went to South Sudan while fields in Block 1, 2 and 4 were split between the two new nations - Sudan and South Sudan.

    

"Production from Block 5A in South Sudan, which was producing 16,000 barrels per day before the shutdown of operations in January last year, resumed on April 6," he said.
    
Block 5A is producing less than 5,000 barrels per day currently and will reach pre-shutdown levels before the end of the current fiscal. The parts of Block 1, 2 and 4 in South Sudan, started output on April 13 and are producing less than 20,000 bpd and will reach pre-production level of 60,000 bpd by the end of the year.
    
The parts of Block 1, 2 and 4 in (north) Sudan is producing 50,000-60,000 bpd. Sarraf, who steered OVL out of the post-Imperial Energy acquisition debacle, said the company has been able to get joint operator ship of Block 5A with Petronas of Malaysia. "We have been able to convince Petronas to share operatorship with us," he said.

    
OVL had gone into a shell post the January 2009 acquisition of Russia-focused Imperial Energy for USD 2.12 billion as the buyout was severely criticised by many including the Comptroller and Auditor General (CAG) as output and reserves lagged projections. Output at about 12,000 barrels per day was short of 35,000 bpd projected at the time of acquisition.
    
Sarraf after taking over as Managing Director in September 2011 turnedaround OVL into an aggressive acquirer, clinching a USD 1.001 billion deal to buy US energy major Hess Corporation's stake in an Azerbaijan oilfield and USD 5 billion acquisition of ConocoPhillips' stake in a Kazakhstan oilfield.

    
Sarraf said the company continues to explore and discover new oil reserves in both Block 5A and Block 1, 2 and 4.

Landlocked South Sudan took over three-quarters of the formerly united Sudan's output of 490,000 barrels a day when it declared independence in July 2011 after a two-decade civil war. Before the shutdown, South Sudan depended on crude exports for 98% of government revenue.

Oil production started after agreement between the two nations on transit fee and other charges for transporting oil from South Sudan to port in (north) Sudan for export.
    
South Sudan's oil flows to Port Sudan through two main pipelines, one operated by Petrodar and the other by Greater Nile Petroleum Operating Company (GNPOC).

    
Block 1, 2 and 4 are operated by GNPOC. Before the shutdown, GNPOC produced more than 300,000 barrels of oil per day from 8 main oil fields, Heglig, Unity, El Toor, El Noor, Toma South, Bamboo, Munga & Diffra. The oil is transported through more than 1,500 km pipe line supplying over 60,000 barrels of oil per day for local consumption to the El Obied and the Khartoum refineries. The remaining is exported through the marine terminal in Port Sudan.
    
The company continues to explore and discover new oil reserves from thee Block 1, 2 & 4 concession areas, he said.

     
OVL currently has 32 projects in 16 countries, of which 11 are producing, five are under development and 14 other are in the exploratory phase.