Cash-strapped Sudan open for oil bidding

December 19, 2011
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KHARTOUM, Dec 19 – Cash-strapped Sudan on Monday said it will open six exploration blocks for bidding by international oil companies, after losing 75 percent of its oil production when the south separated in July.

“Everyone is invited to invest in this country,” Minister of Petroleum Awad Ahmed Aljaz told reporters, through a translator.

He said investors will be treated well “as long as they come without any strings or baggage.”

South Sudan, which gained independence in July following a two-decade civil war, produces three quarters of the now divided country’s 470,000 barrels per day of oil.

The vast majority of Khartoum’s export earnings came from petroleum, leaving the government now scrambling for ways to bolster its finances.
The bidding process for the six blocks will start on January 15 and the government aims to announce winners by May, said Azhari Abdalla, director general of the oil ministry’s Oil Exploration and Production Authority.

On offer are 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 gas was earlier discovered in Blocks 8 and 15, while other sites have “potential.”

Four of the sites were relinquished this year by other companies, leaving them open for re-bidding, while two blocks are being offered for the first time, he said.

Officials held the news conference the day before talks tentatively scheduled 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.

“There is no relation between the talks in Addis and what we are doing here,” the oil minister said, referring to the six blocks. “These blocks are within the sovereign borders of Sudan.”

Energy-hungry China is the largest foreign investor in Sudan’s oil sector, and the biggest buyer of Sudanese crude.

US President Barack Obama last year extended economic sanctions against Khartoum over what the White House called its alleged support for Islamist militant groups, and the situation in Darfur.

The United States has banned virtually all trade with Sudan since 1997.
Sudan’s President Omar al-Bashir is wanted by The Hague-based International Criminal Court for war crimes, crimes against humanity and genocide allegedly committed in Darfur.

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