Nile Deal: Sudan Likely To Set Jan 31 Deadline To OVL

New Delhi, December 24: | Updated: Dec 25 2002, 05:30am hrs
The Sudanese government is likely to decide by January-end the fate of ONGC Videshs proposal to buy Canadian Talisman energys 25 per cent stake in the Greater Nile oil project for $720 million.

The deal (between OVL and Talisman) had to be referred to the Sudanese government after the other partners in the Greater Nile project Petronas of Malaysia and China National Petroleum Corporation (CNPC) of China showed interest in buying Talismans stake, informed sources said.

The drop-dead date for deciding the pre-emption rights exercised by Petronas and CNPC is January 31, sources said, adding as per the contract for the project, the partners have the first right to buy if any of them decides to sell its stake.

Petronas and CNPC have the first right to buy Talismans stake at the price it has agreed to sell it to OVL, sources said.

Sources said the issue has been referred to Sudan as the law of the land there does not permit any foreign company to hold more than 40 per cent interest in any oil and gas field.

Petronas has 30 per cent stake in the 230,000-bpd project while CNPC has 40 per cent. The remaining 5 per cent is with Sudans national oil company Sudapest.

Since CNPC already has 40 per cent stake in the field, it cannot increase its stake any further through buyout of other partners, sources said, adding Petronas can however take 10 per cent shareholding of Talisman, leaving only 15 per cent for OVL.

Sources said Talismans share of revenue from sale of oil produced from the project is being escrowed to OVL account from September 1, 02, the date on which the sale price of $720 million was frozen. The OVL, the overseas arm of ONGC, will pay interest on $720 million from September 1 till the payment is made, they said.

PTI