ONGC's overseas exploration arm ONGC Videsh Ltd (OVL) is expecting to resume production in South Sudan in next 2-3 months following an understanding between North Sudan and South Sudan. However, OVL’s total output this fiscal may be lower than last year.
Taking to reporters in New Delhi, OVL managing director D K Sarraf said some understanding has been reached between North Sudan and South Sudan. “South Sudan has agreed to pay pipeline and processing charges on crude to North Sundan. Once this gets operationalised, we expect production to resume in South Sudan. It could take a couple of months,” he said. Production from North Sudan has been restored to its normal level to 50,000 barrels per day. However, no production is coming from South. United Sudan was producting 130,000 barrels daily. OVL has a 25% share in the fields.
Sudan was divided into North Sudan and South Sudan in July 2011. While most of the crude production came from landlocked South Sudan, infrastructure like pipeline and processing facilities was located in North Sudan. The North was seeking tariffs, to which South did not agree. This had affected OVL’s production in Sudan.
The impact from Sudan, coupled with the impact of sanctions in its Syrian assets, pulled OVL’s output down to 8.753 million tonnes in FY12, down over 7% from 9.448 in FY11. This was first ever annual drop in OVL’s history.
Sarraf said the current year’s performance will depend on the geo-political situation on which the company has no control. “We will try to catch up with last year’s production but it could fall further as most fields are aging. Situation must improve in FY14”. He hoped that output from overseas assets could get a boost from the next fiscal year as new fields in A1 and A3 in Myanmar would be commissioned.
