THE OIL SECTOR

           a. Oil was first refined and distributed commercially in Sudan in 1928 by Shell. Later Mobil Oil (1953).Total (1954) and Agip (1959) set up their own downstream operations. Total sold out to Nile Petroleum ( a Sudanese company) while Agip sold out , to GAPCO ( a marketing company operating in Central Africa with a mixed ownership of Mauritius and Indian)

            In 1976 the Government of Sudan established the General Potroleum Corporation (GPC) under the umbrella of the Ministry of Energy and Mining to promote the oil industry. It was responsible for the importation of petroleum products for domestic consumption and refining of crude oil. The oil importation bill is above 400 million US dollars taking about 66% of export earnings of Sudan.

          b.OIL PRODUCTION:

              The American Company Chevron began work in 1980 and discovered the Heglig field in 1982. The initial exploration indicated reserves of 200 ,000 barrels per day and reserve of 15-20 years. In 1983 Chevron pulled out for political reasons and exploration and production ceased.

            In 1990 the Government introduced a production Sharing Agreement in order to attract investors to develop its oil resources. The Agreement granted exclusive exploration rights and included tax and foreign exchange concessions.

            Areas with potential exploration have been divided into 15 blocks.Concessions are awarded by block number. The largest and most important of these blocks in El Moglad basin. The Unity and Heglig oil fields are on El Moglad basin situated some 800 -km south west of Khartoum.

            A consortuim called the Greater Nile Petroleum Operating Company (GNPOC)has been established to develop these fields. The Sudan National Petroleum Corporation hold a 5% stake in the consortium , with the Chinese National Petroleum Corporation holding 40%, Petronas Garigali of Malaysia have 30%  and Talisman Energy of Canada the remaining 25% . The consortuim has pledged more than US $ 1200 million to develop the fields, including the construction of 1600 km pipeline from the fields to Bashair terminal in the Red Sea. Production is estimated at 150,000 bpd and could grow to 400, 000 bpd over the medium term. First shippment was dispatched on late Augest 1999. Part of the crude from the pipelines is fed to Concorp refinary south of Khartoum and Khartoum North Refinary recently started production.

            Other International Oil Companies have taken concessions in other blocks. Still the oil sector is of tremendous  opportunity. There is great potential for investment and the Government of Sudan is taking an extremely flexible approach to companies willing to invest in this sector. The spin off business from the development of the sector is also considerable . There is need for equipment of the field station from the construction of camps, road links and communications to the supply of vehicles and catering equipment. The growth of oil sector has also stimulated the need for power stations, roads , bridges, and the development of a river transport system, communication, light industry and petrochemical industry. ( For further information on exploration and production the Ministry of Energy and Mining can be contacted).