Sudan: Petronas Steps Out In National Service
New Straits Times (Malaysia), July 21
WHEN Petronas staff in Khartoum, Sudan, tell visitors they are doing a national service for Malaysia, one could be forgiven for taking them seriously.
First there is the weather. On a good day, the capital city of the largest country in Africa is sunny, with an average of 40 degrees celsius.
At the height of the dry season between April and December, it can be 51 degrees and stepping outside air-conditioned areas means going through a baking oven.
There are also sandstorms, haboub in the local language, which can mean zero visibility and a standstill of all activities. Schools, offices, shops and airports shut down to wait out the storms.
In Port Sudan, for 28 days straight, a Petronas employee works from 7am to 7pm where stepping outside the container office in the middle of nowhere means having a herd of sheep and camel for company, and rocks and sand as far as the eyes can see.
Taking a break downtown consists of sitting down in a rundown club house until 10pm sipping local fruit juice.
Then there is the way things are done in Khartoum. A non-resident needs a permit, which can sometimes mean having to go through five ministries to go anywhere outside Khartoum.
At midnight, if you are still on the road, be prepared to subject yourself to a body search by the army.
The city used to have a midnight to 6am curfew, but things have been relaxed somewhat in recent years due the improved political situation.
The Grand Holiday Villa Khartoum, one of the few five-star hotels in town, is run by Malaysia's Holiday Villa International - owned by Advance Synergy Bhd.
Because the hotel is home to some of the Petronas staff, the hotel tries to offer authentic Malaysian food in its menu.
But the effort can be very trying when consignments of sauces and spices get stuck at Port of Sudan for months waiting for the owners to get the right permits.
Most of the goods, including machinery and equipment imported to Sudan come through the port city which is about 1,400km by road from Khartoum.
A 4WD, which is a necessity in this desert country, will be driven from Port Sudan to Khartoum. One does not buy them or any other car off the showroom.
Once, a consignment of air-conditioners for a Malaysian company failed to get past Customs inspection because the personnel in charge were not familiar with the models.
Oil was discovered in Sudan as early as the 1920s but it was only lately that it was explored commercially.
In the 1970s, Chevron developed two oil fields but the company pulled out in 1984, three days after its camp base in the south of Sudan was attacked by rebels.
These days, any trip outside the camp base where the same oil fields are being operated by Petronas and its partners, must be accompanied by two heavily armed army escorts because the rebels can be as near as 30km away.
In the early days of exploration, a few workers have been kidnapped while a local driver was killed when he was shot by the rebels.
In 1992, the Sudanese government invited Petronas to explore for oil in the country, but not much could be done then because the national oil company was busy with another exploration project in Vietnam.
The second invitation came in 1995, and Petronas followed up with a technical study, jointly conducted with the Sudan Oil Exploration and Production Authority, to assess the productivity of Block 5 in Muglad and Blocks 3 and 7 in Melut Basins (all about a two-hour plane ride from Khartoum).
The breakthrough came in July 1996 when the Sudanese Government invited Petronas to participate in the Muglad Basin integrated project, together with three other oil companies from China, Canada and Sudan.
A consortium was formed between the four, called the Greater Nile Petroleum Operating Company in which Petronas has a 30 per cent equity.
Petronas's stake in GNPOC is through Petronas Carigali Nile Ltd, a subsidiary of Petronas Carigali Overseas Sdn Bhd.
Other partners of GNPOC are China National Petroleum Corporation (40 per cent), Talisman (Greater Nile) B.V. of Canada (25 per cent) and Sudan's national oil company, Sudapet (five per cent).
The Muglad Basin project was awarded to GNPOC upon signing with the Sudanese government in March 1997, a 30-year exploration and production sharing agreement and a crude oil pipeline agreement for upstream and downstream activities respectively.
Upstream, the activities includes exploration and development of existing and new fields in the blocks as well as putting up production facilities which cover the construction of a 150,000 barrels per day central processing facility and 70km pipelines from the fields to the facility.
Dowstream, the activities incorporate the construction of a 1,504km export pipeline, six pump stations and a marine export terminal at Port Sudan.
Physically, Petronas came to Sudan in 1997, said Petronas Country Manager Omar Suhaimi Abu Hassan, during a briefing for a group of local journalists on a familiarisation trip to Petronas' oil facilities in Sudan last week.
Omar, who is one of the pioneer staff, cited logistics as the most common obstacle they face.
GNPOC general manager for exploration and production Mohd Johari Dasri, meanwhile said his biggest headache was managing joint operations involving four partners with different work systems and procedures.
Despite the obstacles, oil was exported barely a year-and-a-half later.
Sudan joined the elite club of oil exporting countries when it exported its first cargo of crude on Aug 30 last year.
Since then, Sudan has been exporting 4.5 million barrels of oil monthly.
For the past 20 years, the performance of the Sudanese economy has been sluggish due to civil war, a drop in foreign investment, high inflation, large foreign debt and counter-productive economic policies.
Sudan relies heavily on agriculture with 80 per cent of its workforce in the sector. Its major exports are cotton, gum Arabic, sesame and livestock.
The US has also imposed economic sanctions against Sudan since 1997.
This means US companies are not allowed to engage in any trade with Sudan except for gum Arabic, of which the country produces 70 per cent of the world supply.
The crystal-like gum is an important ingredient in Coco-Cola and other carbonated drinks.
The secretary-general of the Ministry of Energy and Mining, Hassan Mohd Ali, said the Sudanese Government is expecting a US$200 million (RM760 million) income, at least in the first quarter of the oil exporting period, to be used to build roads, schools and irrigation projects.
"It is not just the money. As an oil exporter, we are now self-sufficient.
"Since April when we stopped importing oil, which cost us US$300 million the whole of last year, we can now use the money for the other causes such as building our infrastructure," Hassan said when met at his Ministry.
Hassan, an engineer by training and who used to work for Shell, is passionate about outside understanding of Sudan, and how oil would change his country.
"Poverty is the root of all problems. And once we can eradicate this with the resources that we have, I believe we can look forward to a better Sudan," he stressed.
Already, human rights and environment activists, and non-governmental organisations are accusing the Government of misusing the oil income to fuel civil war.
The National Islamic Front, which has led the Government since 1993, has been accused of most of the abuses.
When asked what steps have been taken to counter these accusations, Hassan said:
"The Government has always been open about outsiders coming to see for themselves what is happening here."
Last year, a group of Canadian journalists were invited to visit the oil facilities after Talisman was accused of being partly responsible for funding the war chest through oil money, and of tolerating human rights abuses.
They pointed out one of two weaknesses, but overall, they were satisfied. A study carried out by an independent Canadian body was also favourable to Sudan.
"We never say that we are 100 per cent OK. It is just that we better than what you think. We are not getting the right assessment," said Hassan.
Mining and Energy Minister, Dr Awad Ahmed Au El Jaz, who received the Malaysian journalists at his office, said:
"Please compare the reality with what you have read.
"Make your own judgement and what you write will be a signal to Malaysian investors whether they should come and invest in our country."
As for Petronas, the Minister said his Government looks forward to more cooperation with the corporation.
Hassan said Petronas was becoming a major player in the Sudan oil industry and the economy, in general.
We appreciate the fact that it is a major exploration, crossing deserts, mountains and the Red Sea.
Apart from exploration, we have received a lot of assistance from Petronas to build our pool of skilled workers, so that Sudan can be self-efficient in future and have enough experts in this field.
Petronas, through GNPOC, has a Sudanisation programme. By 2001, 60 per cent of the staff would be Sudanese and by 2006, it would be increased to 90 per cent.
Hassan said that as befits a multinational company, Petronas has not neglected its social responsibility. Petronas does not restrict itself to oil.
It has so far undertaken two social projects. It funds a trustee which runs Sakina Institute, a hostel and school for underprivileged girls in Omdurman town in Khartoum.
And it gives machinery and other forms of aid to a factory manufacturing artificial limbs.
"We feel very close to Petronas, probably because of the skin colour and same names. My people feel at home with Malaysians," said Hassan.
In fact, further cooperation is in the pipeline. The Sudanese Government and Petronas are currently negotiating to explore oil in new blocks.
"In principle, we have decided that Petronas will take the lead in the project with a 40 per cent or more stake. Sudapet will take up 15 per cent.
"We will operate this jointly. Other foreign partners will be invited but we want them to be sleeping partners.
"We want to take the same route that Petronas took and be where it is now," Hassan said. |
