Sudan: New Muglad basin block awarded
Middle East Economic Digest, May 18
Exploitation of the country's substantial hydrocarbons resources is moving ahead with the award of a new onshore exploration block in the Muglad basin. The government signed on 3 May an exploration and production sharing agreement with a consortium of international oil companies (JOCs) for the licence to develop Block 5-B.
The operating team is Malaysia's Petronas Carigali Overseas, with a 41 per cent stake, and the state-owned Sudapet, with 10 per cent. Austria's OMV and Lundin Muglad -a wholly-owned subsidiary of Sweden s Lundin Oil - are also participating in the venture, each holding a 24.5 per cent stake.
Block 5-B covers an area of 20,119 square kilometres in the south of the country and is adjacent to Block 5-A where drilling tests are well advanced. Lundin is the operator in Block 5-A, in partnership with Petronas, DMV and Sudapet. Three-D seismic surveys in Block 5-B will begin in June, followed by initial test drilling in 2002, the operators say.
The Muglad basin, 800 kilometres southwest of Khartoum, is one of the last remaining undeveloped but proven oil exploration areas in the world. Both blocks are adjacent to he Unity and Heglig fields, which have reserves estimated at 650 million-800 million barrels.
The predominantly Christian area has also attracted the attention of humanitarian organisations, which have focused their attention on the activities of lOCs in the Muglad basin. "Negotiations for Block 5-B have been going on for a long time," says Lundin Oil's president, Ian Lundin. "The decision to go ahead with the agreement preceded any of the current humanitarian issues."
Operators have been accused by humanitarian groups of turning a blind eye to human rights abuses, in the search for bigger profits. However, oil company executives have been quick to refute the allegations, stating their commitment to the region and its local community.
"Our presence does more good than harm," says Lundin. "It has focused world attention on what is happening. If foreign companies pulled out as a result of humanitarian considerations this would result in mayhem." |
