oil opportunities in sudan - investment promotion consultants opportunities in … · oil...

Oil Opportunities in Sudan

Prepared by

Samasu International Company Ltd

May 2004

P.O.Box 6434 AL Takamul Khartoum, Sudan

Tel : + 249 1 8346 0838 / 39 Fax : +249 1 8349 2027

E-mail: [email protected] Web: http://www.samasuoil.com

mailto:[email protected]

http://www.samasuoil.com

Oil Opportunities in Sudan Samasu International Company Ltd.

© Samasu International Company Ltd. 1

Contents: 1. INTRODUCTION:................................................................................................................................ 2 2. HISTORY OF OIL EXPLORATION ............................................................................................... 3 3. OUTLINES OF THE GEOLOGY OF THE SUDAN .................................................................. 6

3.1 Summary of Petroleum Geology: ................................................................................................... 6 4. LICENSE POSITION IN SUDAN ..................................................................................................10 5 SUDAN CRUDE OILS ........................................................................................................................13 6. PRODUCTION SURFACE FACILITIES ......................................................................................13 7. INFRASTRUCTURE IN SUDAN....................................................................................................13 8. LEGAL FRAMEWORK .....................................................................................................................15 9. APPLICATION FOR CONCESSIONS IN SUDAN. ..................................................................15



1. INTRODUCTION: Sudan is the largest country in Africa with a total area of 2.5 Million Sq. Kms. It has a very unique and strategic location. With common border to nine countries and the Red Sea coast in the East it is considered an important gate to Africa (Fig.1). Oil Exploration activities in Sudan started in the late fifties. To date huge amount of hydrocarbon reserves have been discovered both offshore and onshore by several operating companies. Daily production is currently at 250,000 BOPD. Several new fields are now under development and expected to commence production in the near future.

A 1600.00 km crude export pipeline was built from the fields in Western Sudan to the export terminal of Bashayer in the Red Sea. One other parallel line is under construction and a third one is under negotiation and design. The Government of Sudan offers excellent term for interested companies and the country has seen an ever-growing interest by foreign investors ranging from Major Multinational oil companies, to major National oil companies and individual investors.

FIG. (1): THE LOCATION MAP OF SUDAN IN EAST



2. HISTORY OF OIL EXPLORATION Oil Exploration activities in Sudan date back to the late fifties, when the Italian Agip was granted the first exploration permit in the Red Sea. However the major episode in the Exploration history in Sudan is that of Chevron Oil Company of Sudan (Mid

seventies to late eighties) which started in the Red Sea and shifted to the interior Basins in Western and southern Sudan. The table below summarizes the major events in the Oil Exploration history in Sudan. It also shows the current Right holding situation in the various exploration blocks.

Table (1) LIST OF MILESTONE IN SUDANESE OIL EXPLORATION

Date Event Remarks

1959

AGIP Minerarier and General Exploration of California were granted the first exploration permit in an area of approx 800 sq. Km. in the Red Sea.

AGIP acquired seismic. Drilled 6 wells (1961-1962) no discovery.

1966 AGIP submitted re-enouncement of its Red Sea concession

1967 DIGNA Petroleum awarded Exploration permit in 10500sq.km in the Red Sea

DIGNA, a consortium of : TEXAS group (50%), Sheikh Ahmed Aljaber Elsabah (25%), Sudanese Businessmen (25%)

1968 DIGNA awarded additional area of 7630sq.km CONOCO took interest in the consortium

The Group acquired Magnetic survey data

1968 Sudan government acquired aeromagnetic survey in N.W desert

1972 DIGNA Relinquished its concession

1974

BALL & COLLINS ( Oil & Gas ) Ltd awarded 13600 sq.km Sudanese Resource Development Corp. awarded 14,400 sq. km AMERICAN PACIFIC International awarded 3 Blocks ADOPE Corporation of TEXAS awarded a block. In October 1974 CHEVRON Oil Co. of Sudan awarded 28,800 sq. km in the Red Sea area. In November 1974 CHEVRON was awarded licenses in 516,000 sq. km in the south-western and South-eastern interior Basins

No drilling activities



1975

TEXAS entered in 50% partnership in Chevron’s Red Sea concession and acquired 75% in American Pacific & Ball/Collins licenses. In November 1975 Chevron made 25% compulsory relinquishment in the interior concession CHEVRON’S license in the interior was transferred into a production sharing agreement (PSA)

1976

Sudanese resources permit was cancelled. CHEVRON relinquished 12.5% of original interior basin area.

Chevron completed 2 offshore wells: one as a gas discovery, the other as gas condensate discovery

1977

Chevron Texas abandoned all rights in the Red Sea Chevron drilled the First well in Abu Gabra area in the interior basins (dry hole)

Chevron drilled 1 dry hole in the Red Sea Area.

1978

American Pacific’s and Ball & collins’s rights expired Chevron holds 250,000 sq. km with a PSA.

Chevron drilled Barak-1 wildcat well in the interior proving potential source rocks First discovery small amounts of oil in Unity-1 well.

1979

Chevron was granted 73,000 sq.km in interior basins. Burmah, Eastern Petroleum, Texas Eastern and Total were granted 37,000 sq. km in the Red Sea

1980 TOTAL group was granted a concession in the Red Sea

Total drilled Bashyer-2 and abandoned it as a dry hole.

1981 TOTAL, IEDC and GPC groups were granted a concession in the interior basins.

1982 SUN Oil awarded a concession in central and north central

.Drilled 6 wells

.Terminated in 1990

.Union Texas drilled Digna-1

1993 STATE PETROLEUM COMPANY awarded blocks 1,2 and 4 Discovered Oil in blocks 1 and 2



1995 CHINA NATIONAL PETROLEUM CORPORATION signed EPSA over block 6.

Now pipeline under construction

1996 A consortium groups, CNPC, SPC PETRONAS, and SUDAPET signed agreement. blocks 1,2&4

Production since 1998. TALISMAN has taken the share of SPC.

2000

A consortium of GULF PETROLEUM, MELUT COMPANY and SUDAPET signed EPSA over blocks 3E,7E and3D

Later MELUT share was assigned to CNPC and THANI Corporation

2001

A consortium of PETRONAS, LUNDIN MUGLAD OMV and SUDAPET signed EPSA over block 5B.

2002 SLAVNEFT and SUDAPET signed EPSA over block 9.

Agreement terminated by Government

2003

ZAVER PEROLEUM COMPANY and SUDAPET signed EPSA over block 9. PETRONAS, SUDAPET and HI TECH Signed over block 8.



3. OUTLINES OF THE GEOLOGY OF THE SUDAN

3.1 Summary of Petroleum Geology: Sudan geological study was focused on the surface geology mainly for surface mapping and limited shallow mining activities. With the recent discovery of commercial hydrocarbon, extensive subsurface data has been acquired both offshore and onshore. These data revealed existence of several sedimentary basins offshore in the Red Sea and onshore in the interior Sudan. Main sedimentary Basins are shown in Figure (2). These basins are all rift basins, owing their existence to the rifting activities of Western, Central and East African Rift Systems.

Exploration is still at early stages and the data collected is scarce. Based on the available data and from analogy to other basins it can be concluded that the major conditions for Petroleum accumulations have been met. Hundreds of metres of rich source rocks have been penetrated in Muglad, Melut, Blue Nile, Red Sea, Khartoum, and White Nile Basins.

FIG (2) GEOLOGICAL MAP OF SUDAN



Excellent and extensive reservoir quality sands have also been drilled. The oldest sedimentary basins encountered so far in Sudan are of Cambro - Ordovician age? These occur within narrow grabens formed by rifting, which preceded consolidation of Pan African structures in north and north-western Sudan, Fig (2) shows the distribution of sedimentary basins in Sudan. Much attention has been given to an already explored Mesozoic rift related basin systems, in the south and central Sudan, while the Palaeozoic basins in the NW Sudan have not been explored. Data from these basins such as surface geology, regional gravity and magnetic which indicate that the basins are deep and filled by thick pile of marine and continental sediments during Palaeozoic and Mesozoic times e.g. Murdi basin (4.5 km depth) , and South Wadi Howar basin (5 – 6 km) . The gravity, seismic and drilling data acquired in interior Mesozoic basins in the central and southern Sudan indicated that more than 30000 feet of clastic sediments occur within the deepest central trough of the three major rift basins. Fig (3), shows generalized stratigraphic columns for the Kaikang trough, which runs along the western flank of the Muglad basin and that of Unity in the Eastern flank, whereas, Fig (4) shows the stratigraphy of the Melut basin. The sediments are interbedded sandstones, claystones, siltstones, mudstones and shales. Intrusive rocks (Sills) were encountered in some wells such as in Garad-1, Sobat–1, Tabaldi-1…etc.

Changes in lithofacies primarily reflect variations in the subsidence rates of various sub-basins. The lack of significant magmatism during active rifting is attributed to the shallow depth of fault detachments at a brittle – ductile transition zone. Abu Gabra Formation is the main source rock, consists of dark lacustrine shales containing a typically waxy kerogen and proved to be a reservoir in block # 6. Bentiu formation, Darfur group sandstone members, Amal and Tendi formations are the principal reservoirs. Shales and claystones within Darfur Group as well as shales and claystones within Abu Gabra Formation act as seal to underlying oil bearing horizons. None of the wells drilled in the Melut basin, has encountered the source rocks, however, based on the crude oil biomarker distributions and characteristics, it is believed that the source rock in Melut basin is equivalent to the Abu Gabra Formation found in the Muglad basin. Yabous Formation is the main reservoir in Melut basin. Time of oil migration is uncertain, but it seems to be during mid to late Tertiary in the Muglad basin and during mid – Cretaceous to Late Cretaceous time in the Melut basin. The present temperature gradients over these basins are normal and no over pressure zones have been recorded so far



FIG.(3) : STRATIGRAPHIC SUMMARY OF MUGLAD BASIN

1°

1°

E R A

P E R I O D

S O U R C E

R O C K S

S H O W S &

T E S T

R E S E R V O I R

AGE / EPOCH LITHOSTRATIGRAPHIC NOMENCLATURE

PRINCIPAL LITHOLOGY

C E N O Z O I C

T E R T I A R Y

M E S O Z O I C

C R E T A C E O U S

PRE CAMBRIAN Basement

Pleistocene

Pliocene

Miocene

Oligocene

Eocene

Paleocene

Maastrichtian

Campanian

Santonian

Cenomanian

Albian

Aptian

Barremian

Turonian

Neccomian

Coniacian

Zeraf / Adok Formation

Tendi Formations

Senna Formation

Aweil Formation

Upper Argilaceous Member

Lower Argilaceous Member

Amal Sandstone Member

Darfur Group Undifferentiated

Rakuba Member Bentiu

Formation

Abu Gabra Formation

* * *

* *

* * * * *

* * *

* * *

* * * * *

*

*

* *

* *

*

* *

*

*

*

* *

*

*

*

*

*

* *

*

*

*

*

* *

*

*

*

* * * *

* *

* * *

*

* 2°

2°

*

*

* *

*



FIG (4) STRATIGRAPHIC SUMMARY OF MELUT BASIN

AGE

Pleistocene Pliocene

Maastrichtian

Oligocenee Eocene

Paleocene

Holocene

Campanian

Santoniann

Cenomania Albian Aptian

Barremian

Turonian

Coniacian

Neocomian

Tithonian

N.MELUT BASIN

SN.MELUT BASIN BLUE NILE BASIN

Agor Formation

Biyut Formation

Dulyat Formation

Daga Formation

Upper unit Middle unit Lower

Adar Formation

Yale (YABUS) FM

Melut Formation

Garjak Formation

Nuer Formation

Lau Formation

Nasir Formation

Sobat Formation

Miadol Formation

jimidj Formation

?

? ?

?

?

?

?

?

Miocene

U. M. L.

U. M. L. U. L.

U. L.

U. L. U. L. U. L.

Damazin Formation

Dinder Formation

Blue Nile Formation

Jokau Formation

v

v

v

v

v

(Main reservoir)



4. LICENSE POSITION IN SUDAN The International oil companies operating now in Sudan includes:

• Block 1, 2, 4, Greater Nile Petroleum Operating Company (GNPOC).

• The shareholders are CNPC (40%), Petronas (30%), (ONGC) (25%) and Sudapet (5%).

• Block 6, China National Petroleum Company CNPC

• (95%) AND SUDAPET (5%). • Block 5A, the shareholders Petronas

(68.876%), OMV AG (26.125%) and Sudapet (5%).

• Block 3&7, CNPC, 41%, PETRONAS, 40%, THANI, 5%,

• GPC 6% and Sudapet 8%. • Block B, Total EXPLORATION -

Sudan, the shareholders are • Total Exploration (32.5%), Marathon

Petroleum (32.5%), Kuwait Foreign

Petroleum Exploration Co. (25%) and GPC (10%).

• Block 5B, Petronas (41%), OMV (24.5%), IPC (24.5%) and Sudapet (10%).

The Ministry of Energy and Mining has adopted the block system. Since 1992, accordingly the Sudan basins were divided into a number of blocks based on the amount of geophysical, geological and drilling works done Fig (5) and table (2&3). Most of these blocks are free for contracting with any company or a group of companies, which are capable financially and technically to do the work. All data for the free blocks are available in the Sudan route

Table (2) LIST OF SUDANESE BLOCKS (MAR., 2003). BLOCK NAME SUB-BLOCK AREA (SQ. KM.). OPERATOR

1 UNITY 1(a) 7173.26 GNPOC

1 UNITY 1(b) 154.88 GNPOC

2 2(a) 154.88 GNPOC

2 HEGLIG 2(b) 8628.62 GNPOC

3 ADAR 3(D) 140.8 PETRODAR

3 ADAR 3(E) 10361 PETRODAR

4 KAIKANG 32586.08 GNPOC

5 SUDD 5(a) 29885 Petronas OMV, Sudapet

5 SUDD 5(b) 20199.3 Petronas OMV, Sudapet

6 ABU GABRA 6 25900 CNPC

7 MELUT 7E 61918.73 PETRODAR

8 BLUE NILE 8 65856 PETRONAS

9 KHARTOUM 9 126090 ZAVER

10 GEDARIF 10 57604 F

11 HUMRA 11 119124 F

12 MURDI 12 250000 F

13 DNGUNAB 13 24600 F

14 ABYAD 14 135020 F

15 TOKER 15 28100 F

16 HALAIB 16 10300 IPC



FIG. (5): SUDAN OIL AND GAS CONCESSION MAP



TABLE (3): DATA SUMMARY IN THE DIFFERENT BLOCKS

BLOCK Area(Sq.KM.) Magnetic Gravity (KM) 2D SEISMIC 3D SEISMIC WELLS

1, 2 & 4 50000 15000 2884.3 33395.91 2217.36 233 3 D 140.8 360 - 3 3 E 10361 6320 515 2 5A 29885 60000 3929 182 3 5B 20199.3 2940 - 6 38468 25800.14 1398 35

7E 61918.73 5660 310 1 8 65856 9940 8900 1996 - 1

9 126090 150272 More than 3000 - 3

10 57604 3453 80 -

11 119124 More than 3000 - 3

12 42888 3152.5 - 13 24600 1429551 2098 - 3 14 135020 5000 - 15 28100 21725 10500 8950 - 9 B 118586 86433 6033 1679 -

C 65750 5244 More than 2000 - 2



5 SUDAN CRUDE OILS Table (4) shows five oil samples selected from different oil fields in Muglad and Melut basins to present the wide spectrum

of Sudanese crude oil properties, which range from heavy oil to light oil.

TABLE (4): SUDANESE CRUDE OIL PROPERTIES FROM TEST RESULTS

PROPERTY HEGLIG

UNITY-9 TALIH-2 TOMA South

ADAR

API 28.4 33.6 38.5 42.6 30 BS & W VOL% 0 0 0 0 0 P. POINT F/C 64/18 81/27 86/30 76/26.1 105/40.5

SALT CONT. Ib/Kib 2 22 2 SULPHER WT. % 0.058 0.07 <0.05

CST” 60 deg C 33.47 14.31 43.27 15.7 11.6”75.5 deg C GAS/OIL RATIO 0.45 15.15 146.4 30

BPP psig “ 100 deg F 10 75 180 50

6. PRODUCTION SURFACE FACILITIES Table (5) shows the production surface facilities now available in different oil fields

TABLE (5): PRODUCTION SURFACE FACILITIES IN DIFFERENT OIL FIELDS

FIELD CRUDE OIL TANKS SEPARATER REMARK

HEGLIG CENTRAL PROCESSING FACILITIES

ABU GABRA CPF SHARIF 2 X 500 bibles 1 MELUT 1 X 5000 bibles

Adar - Yale 1 X 5000 bibles Total 26600 4

TO TREAD 250,000 BBL/D

30,000 BBL/D

EARLY PRODUCTION

FACILITIES.

7. INFRASTRUCTURE IN SUDAN FIG (6) shows part of the petroleum infrastructures in the Sudan, which include the existing refineries, the crude oil pipeline route (L = 1610 KM., Dai. = 28 Inch, Max. CAP. = 450000 BBLS/DAY) and

transportation means. In addition to these there are good communication means, airports, airstrips...etc.



FIG. (6): OIL INFRASTRUCTURES IN SUDAN



8. LEGAL FRAMEWORK • The Petroleum Resources Act 1998 and the Petroleum Regulations of 1973 regulate exploration and production of oil and / or gas accumulations in Sudan both onshore and offshore. • Major amendments have been introduced in the petroleum resource Act which gives the Minister of Energy and Mining, with the approval of the Board of Petroleum Affairs, the right to conclude agreements for the exploration and production of oil and / or gas in the Sudan. • All the Agreements signed by the Sudan Government with the international oil companies are Exploration and Production Sharing Agreements (EPSA). The EPSA embodies the entire rights and obligations of the Government and the Oil Company.

• The Oil Company, under the EPSA, recovers its operations cost from an agreed and negotiable percentage of the total production. The profit oil is divided between the Government and the Oil Company according to certain percentage to be agreed upon by both parties. • Equipment of the Oil Company used in petroleum operations are exempted from custom duties. • The oil discovered and exported by the Oil Company is exempted from any export taxes. Exchange rights are provided for in the EPSA and the Oil Company is given the right to sell its share of oil and / or gas and keep the proceeds outside Sudan

9. APPLICATION FOR CONCESSIONS IN SUDAN. Euromark Oil Ltd. has been involved in oil and gas business in the Sudan since early 1990’s. Euromark has established broad and good relationship with government organizations and oil companies in the Sudan. Euromark has full knowledge and experience to assist international oil companies to follow the procedures of applying for concessions in the Sudan, and

can deliver international clients quality and integrated consulting services in geophysics, geosciences, reservoir engineering, field development and economic modelling. For international investors who have interests in the exploration and production domain in the Sudan, Euromark Oil can be a reliable partner to cooperate with.

Samasu’s contact information is: Yasir Sharfi General Manager Samasu International Company Ltd. P.O.Box 6434 AL Takamul Khartoum, Sudan Tel : + 249 1 8346 0838 / 39 Fax : +249 1 8349 2027 E-mail: [email protected] Web: http://www.samasuoil.com

mailto:[email protected]

http://www.samasuoil.com

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