Sudan has denied India’s ONGC Videsh ltd an extension of licence to operate an oilfield as it sought higher royalties and taxes to make up for revenue lost due to drop in oil prices. The licence for Block 2B expired last November and an automatic 5-year extension is available but Sudan, whose revenues have been hit with a drop in oil prices, wanted higher taxes and royalties before it agreed to the same, officials said.
OVl, which held 25 per cent stake in the block, and its partners China National Petroleum Corp (CNPC) and Malaysia's Petronas did not agree to the demand, they said. OVl had in 2003 bought 25 per cent stake in Greater Nile Oil Project (GNOP) comprising Block 1, 2 and 4 in the undivided Sudan. It lies in the prolific Muglad basin, about 780 kms in the South-West of Khartoum, the capital of Sudan. The project produces about 50,000 barrels of oil per day.
Upon secession of South Sudan from Sudan in July 2011, the contract areas of blocks 1, 2 and 4, spread over both areas, were split with a major share of production and reserves now situated in South Sudan. Blocks 2A, 2B and 4N are in Sudan, and blocks 1A, 1B as well as 4S are in South Sudan. Block 2B produces 28,000 bpd of oil while Block 4 is in the exploration phase. The official said OVl and its partners CNPC (40 per cent stake), Petronas (30 per cent) and Sudapet of Sudan (5 per cent) wanted a 5-15 year extension, but Sudan did not agree.