Sudan wants to redraw ONGC Videsh oil contracts

Theres fresh trouble for ONGC Videsh Ltd in South Sudan. Despite assurance from the newly-carved African nation to honour all oil contracts with the undivided Sudan

Theres fresh trouble for ONGC Videsh Ltd in South Sudan. Despite assurance from the newly-carved African nation to honour all oil contracts with the undivided Sudan,the Juba government now wants to redraw these agreements to corner a larger revenue share.

Sources said South Sudan wants more per barrel of crude oil from the Greater Nile Oil Project than the earlier concluded 5 percent for state-run Sudapet.

But foreign partners (China National Petroleum Corp,Petronas and OVL) are clear that profit sharing cannot change because of the creation of the two Sudans,they said.

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The revenue sharing accord between both African nations is roughly 50:50 but South now wants more as the GNOP block straddling both countries — is predominantly in its side. It wants GNOP to sign a Transition Agreement until a new Exploration and Production Sharing Agreement is not finalized.

Inherent in the new pact is the problem of billing the processing and evacuation of the crude oil that is completely in the north. Sudan recently reiterated its determination to charge $32 as transit fees for each South Sudans oil barrel by the end of this month.

But landlocked South Sudan which relies on norths pipeline and export terminals to ship oil through the Red Sea port in Port Sudan is willing to pay only 41 cents citing international norms as in the case of Chad-Cameroon pipeline of similar length.

OVL has 25 percent stake in GNOP (Block 1,2 and 4) which now produces 120,000 barrels per day. The production is unaffected but OVL officials say that it may get impacted if the squabble between the two nations continued.