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Sudan has invited Russian companies to take part in the development of its oil industry, Sputnik reports, quoting the adviser to Sudan’s energy minister. Abdel Zahir Mohammed said that the government had offered Russian energy companies several oil sites, including both producing and untapped ones, as well as fields that are currently being developed by other foreign companies, whom the Russian players would help to increase production.
Sudan has been eager to build an oil industry after the split with South Sudan when it seceded in 2011. After the secession, the two countries have remained mutually dependent on oil revenues, with the south owning 75 percent of the oil reserves, while the north owns the only current transport route to get oil to international markets.
After the secession, a dispute over the transit fees for using Sudan’s pipelines for South Sudan’s production led to a shutdown of the production and transportation of oil. In 2012, South Sudan and Sudan reached an agreement that allowed South Sudan to resume its oil exports via Sudan.
So, at the moment, Sudan is mostly a pipeline provider for its neighbor—and possibly Uganda and Kenya in the future—rather than an oil producer.
Yet the country is hopeful about its oil reserves. A potentially major discovery was made back in 2011, in the Al Rawat Block 25, which is currently fully owned by Sudan’s state oil company Sudapet. Sudan eyes initial production of 10,000 bpd from the field, with the reserves in the field recently upgraded to 165 million barrels from 19 million barrels.
For this production to begin, however, investments of around US$200 million are necessary, local media reported earlier this month citing energy minister Abdul Rahaman Osman. This investment could come from a foreign company; Osman’s adviser told Sputnik that Rosneft, Gazprom, Lukoil, and Tatneft were among the Russian companies invited by the government to tap Sudan’s oil resources.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.