Sudan Sees Open Door for Foreign, US Oil Partners
Reuters
04-NOV-97
By Christine Hauser
KHARTOUM, Nov 4 (Reuters) - Foreign companies are playing a bigger role in the oil sector in Sudan, which hopes to attract Americans despite U.S. rules against deals with the country Washington says sponsors terrorism.
Sudan Energy and Mining Minister Awad Ahmed Al-Jaz said he regretted the withdrawal of the U.S. Occidental Petroleum Corp early this year from joining a project which other foreign companies are now developing after a recent pipeline deal.
"They lost their chance. Political problems got in the way," Jaz said in a weekend interview with Reuters. "When they left they said 'sorry, we can't continue, but we'll wait for the situation to be better and come back again. We still say our country is open for anybody who wants to invest."
Sudanese President Lt. General Omar Hassan al-Bashir said on Saturday that planners will focus in 1998 on oil projects. Oil output is targeted to reach more than 150,000 barrels per day (bpd) in two years from less than 20,000 bpd now. Sudan is also building two more refineries for a total of five.
Oil industry sources said on Tuesday Sudan needs massive foreign infrastructure and exploration investment to reach its goals, and it must also find a solution to its 14-year civil war, some of it in areas not far from southern concessions.
"The great hope was hinged on Occidental," said one. Occidental had pursued a project to develop Sudan's Heglig and Unity fields. The consortium now includes a subsidiary of Canada's Arakis Energy Corp , China National Petroleum Corp., Malaysian state oil company Petronas and Sudan's Sudapet.
The group last week signed a deal with German and Chinese firms to provide equipment for a pipeline from the two fields to the Red Sea, transporting 150,000 bpd from mid-1999, and the construction will be awarded in December. It is part of the consortium's $1 billion project in Sudan.
"We have Americans working in these companies and some American companies applied (to build) this pipeline," Jaz said. "For us the door is open. This is an open invitation." Jaz did not name the American bidder but an industry source said he was sure a U.S. company had been pre-qualified.
Sudan has encountered political minefields attracting American companies, whose shoes have been filled in Africa's largest country by other foreign partners. The U.S. Congress passed an anti-terrorism law in 1996 designed to block deals that might help government-backed terrorists in countries Washington says sponsor terrorism.
While it allowed deals to go ahead in Sudan, in May the head of a Senate panel said he would try to block the loophole. "American companies see sanctions coming down the track," said another industry official.
Occidental said in February it spoke with U.S. agencies about its interest in Sudan. "They (Occidental) like it here. They feel Khartoum is safer than Los Angeles," Jaz said. He said Khartoum had reached the final stage with Oxy when it was called off for political reasons. "They negotiated with us. We reached an agreement. We came to the stage of signing and they asked us to go and attend a meeting in Canada."
But the country is not lacking in foreign interest. In June, Austria's OMV AG joined Canada's International Petroleum Corp and Petronas to explore Block 5 in a southern state. Oil sources said they have committed so far about $900 million.
In July, Jaz was in Iraq to develop an oil accord on exploration, refineries and training of Sudanese in Iraq. Asked what the chances were of American companies doing business in Sudan again, Jaz said: "We said we don't have any objection to any American company. If we agree, we sign."
The oil sources said France's Total and the U.S. Marathon Oil were partners in an oil concession in the southeast which they have not developed recently because it is mined. "The war is still a deterrent and security problems are still a deterrent," said another industry source. "It's not always easy to attract foreign investment." |
