OVL In Negotiations For Acquiring Stake In Sudan Blocks

New Delhi, Nov. 6 ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, is looking at more exploration assets in Sudan. The company is in negotiations to buy stakes in two oil blocks in the African country. OVL is seeking a 30 per cent stake from Petronas of Malaysia in Block 8 in Blue Nile Basin, northeast of prolific Melut Basin. Petronas Carigali Overseas has a 77 per cent interest in the block. The remaining equity is with Sudan''s national oil company Sudapet and High Tech Group. Petronas has undertaken some seismic surveys in the block, and drilling is yet to begin. Total has 31-32 per cent stake in the block. The block also has White Nile as a partner.

OVL already has three blocks in Sudan 5A, 5B, and 1,2,& 4. Petronas had waived off its pre-emption rights to permit OVL to acquire Austrian firm OMV''s stake in Block 5A and 5B. OVL purchased OMV''s 26.125 per cent stake in exploration block 5A, and 24.5 per cent stake in Block 5B for $115 million. Petronas Carigali Overseas Sdn Bhd (Petronas) is the operator of Block 5A, with the remaining five per cent with Sudapet. Considerable exploratory drilling has been carried out in the block by the consortium and two fields namely Thar Jath and Mala have been put on production and cluster of discoveries around Mala are in the stage of development.

The Thar and Mala Field began production in 2006, while production from Mala satellite will commence in 2008. Block 5A, which contains the undeveloped Thar Jath field with gross proven and probable oil reserves of 149.1 million barrels, is producing 25,000 barrels per day. In Block 5B, Petronas has 41 per cent, Sudapet 10 per cent and Swedish oil firm Lundin Petroleum AB 24.5 per cent. The total resource of the block is estimated at 3.5 billion barrels. Block 5B is a large block and is located in the Sudd swamp.