‘According to our estimates the project in Sudan has big domestic risks and does not meet our profitability targets. So we have decided to pull out of Sudan,’ an official at Slavneft said on 2 August. The company is also reviewing its role in Iraq and Iran, where it holds several oil well maintenance contracts, he said.
Despite Slavneft’s decision to withdraw, the latest round of peace talks has drawn the attention of other foreign companies looking to invest in Sudan. ONGC Videsh, the overseas arm of India’s Oil & Natural Gas Corporation (ONGC), offered $750 million to Talisman in June to acquire its stake in the Greater Nile project. Analysts say the Canadian firm may now be holding out for a better offer (MEED 21:6:02).
‘A big issue now is US sanctions, and their impact on the oil sector,’ says one London-based analyst. ‘This was compounded by the Sudanese government imposing major restrictions on foreign companies operating in the country. There is always the possibility that, further down the line, contracts could be renegotiated, and I would not be surprised if some of the big international oil firms are getting interested in Sudan again.’ Talisman is the only Western company operating in Sudan. Both Chevron Corporationof the US and TotalFinaElfof France abandoned local operations during the civil war, but Total has retained its offshore concession rights.
There is no accepted figure for Sudanese oil reserves. The US’ Energy Information Administration has released a conservative figure for ‘estimated proven’ reserves of 262.1 million barrels, but analysts say the true figure is likely to be much higher. Crude production is forecast to reach 450,000 b/d by 2005. Since the first significant exports of Nile Blend in September 1999, oil has come to account for about 70 per cent of the country’s total export earnings.