 | « Back to article | Print this article |
The government has directed ONGC Videsh Limited not to negotiate any long-term contracts for the supply of crude from its Greater Nile Oil Project in Sudan.
"Since the main purpose of acquiring equity oil abroad is to enhance the oil security of the country, OVL should not enter into long-term contracts for the supply of Sudan crude," the government told OVL.
If OVL wants to enter into any long-term contracts for this crude, "it should be done in consultation with the government taking into account the country's oil security needs and policy," OVL has been told.
This implies that the entire quantity of crude from the project that will accrue to OVL will be shipped to India, preferably Mangalore, where it will be processed at the ONGC-owned Mangalore Refinery and Petrochemicals Limited. In May this year, the first consignment of crude from Sudan had arrived in Mangalore.
OVL has acquired a 25 per cent stake in the GNOP of Sudan from Talisman Energy of Canada for $720 million (Rs 3,600 crore (Rs 36 billion)). OVL's share in the project is over 3 million tonnes of crude oil annually.
India's share of equity oil from this field is about 10 per cent of the country's domestic production. The gross sales revenues of the project for 2002, realised by Talisman, was about $500 million (Rs 2,500 crore (Rs 25 billion)) -- twice the amount initially estimated by OVL.
The sweet crude oil produced in the project has high market demand and is currently selling at about $31 a barrel. In addition, two new commercial discoveries were added to the project during the period OVL carried out negotiations.
Sweet crude accounts for 60 per cent of the crude processed in India. Of this, domestic output accounts for half and the balance is imported from various countries, including Nigeria.
Crude plans