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CCEA clears ONGC Videsh plan to acquire stake in Sudan block

By Our Special Correspondent

NEW DELHI AUG. 22. The Cabinet Committee on Economic Affairs (CCEA) today cleared the ONGC Videsh Limited's (OVL) proposal to acquire an equity stake in two oil blocks in Sudan from the Austrian company, OMV. This raises the Indian investment in Sudan where the OVL is already involved in the Greater Nile Oil Project (GNOP), which is currently producing over 12 million tonnes annually.

With this, OVL will acquire 26.125 per cent shareholding of the OMV in Exploration Block 5A as well as 24.5 per cent stake in Block 5 B. According to an official spokesperson, Block 5A is located next to the boundary of the Greater Nile project and also falls in the highly prospective Muglad basin.

It is an exploration block where considerable exploration and drilling work has been carried out. Out of three prospects drilled, one major discovery in Thar Jath and another in the Jarayanan field have already been made.

Currently the contractor for this block is a consortium consisting of the Malaysian oil company Petronas with an equity stake of 28.5 per cent, the Swedish company, Lundin Oil with 40.375 per cent, and the Sudanese national oil company, Sudapet with five per cent shareholding. The OMV's equity stake of 26.125 per cent will now be acquired by the OVL.

It will be recalled that in March this year, the OVL had acquired 25 per cent equity stake in the GNOP which is currently producing 260,000 barrels of oil a day or about 12 million tonnes annually. Of this, the OVL's share is three million tonnes per annum.

The latest available data with the Petroleum Ministry reveals that the OVL's wholly owned subsidiary, ONGC-Nile Ganga B.V. has sold one million barrels of crude oil out of its share from the Greater Nile project to China. The revenues from this sale are estimated at about $25 million. As for Indian refineries, the company has sold 2.4 million barrels of oil to the domestic units till now. The OVL is free to sell its share of crude oil from the Sudan project in East Asian markets as well as in the Mediterranean region.

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