Khartoum, Oct. 23: ONGC Videsh, the external arm of the Oil and Natural Gas Corporation of India, has taken a cue from President A.P.J Abdul Kalam’s constant refrain: “Dream, dream and dream.”
Buoyed by the “success” of its $750-million investment just a year ago in the Sudanese oil sector, ONGC Videsh is dreaming of making the country home for its largest foreign investment. It could be larger than the one in Russia’s Sakhalin oil fields.
The company is also set to make a fresh investment of $1 billion in the Greater Nile Petroleum Operating Company. ONGC picked up 25 per cent stakes in the company earlier this year, replacing Canadian Talisman Energy Inc. to become its oil consortium partner along with the Chinese, Malaysian and the Sudanese governments. The fresh investments will be in two new blocs — 5A and 5B.
Spread over 50,000 sq. km, the Greater Nile oilfields remain largely unexplored. The current estimate of oil reserves in the area is estimated at 150 million tonnes and discovery of crude is growing at an annual rate of close to 10 per cent, according to ONGC Videsh managing director Atul Chandra, who is here to negotiate fresh investments.
Minister for disinvestment and communications Arun Shourie, too, presented a rosy picture of India’s entry into the Sudanese petroleum sector.
Both Shourie and Chandra appear determined that India must take advantage of Western oil companies’ inability to enter Sudan at present due to the self-inflicting sanctions imposed by their governments against the country for allegedly harbouring international terrorism.
The minister said India could soon take up two more blocs for investment.
ONGC Videsh is also set to bag a contract for laying a 740 km-long oil product pipeline from Khartoum to Port Sudan. Sudanese President Al Bashir has conveyed to Kalam his government’s intent to award the contract to the company. Along with this contract will come another one for modernising the Khartoum oil refinery. Together, the contracts are worth over $750 million.
Driving home the significance of the investment in this North African country, Chandra said ONGC Videsh’s crude production in the very first year of operation in Sudan this year stood at 13 million tonnes — as much as the annual production from the offshore Bombay High, the largest oilfield in India. Of this, it has shipped 4.2 million tonnes to India to the Mangalore refinery, the only one in the country with the technology to refine Sudan’s “sweet crude”. Chandra expects the production to go up to 15 million tonnes next year.
The company’s earnings this year from operations in Sudan was around $300 million. Chandra hopes to recover the investment in just three years.