Khartoum opens oil exploration doors to Colombo in over-the-counter offer

Minister of Industry and Commerce Rishad Bathiudeen (left) meets the visiting New Delhi-based Ambassador of Sudan to Sri Lanka Dr. Hassan E. El Talib on 14 June in Colombo

In an unprecedented development in Sri Lanka’s bilateral trade history, Africa’s third largest oil producer opened its prized petroleum exploration doors wide to Sri Lanka on 14 June. This offer, if accepted, will turn Sri Lanka’s national energy picture on its head. 

“If Sri Lanka wants to create its own petroleum you can come to Sudan, for which we can help,” announced visiting New Delhi-based Ambassador of Sudan to Sri Lanka Dr. Hassan E. El Talib on 14 June in Colombo.

El Talib was making a courtesy call on Industry and Commerce Minister Rishad Bathiudeen at the Ministry of Industry and Commerce premises. Joining El Talib was Consul of Sudan in Sri Lanka Firaz Hameed.

“Khartoum is one of the safest capitals in Africa and quite modern. Trained oil skills are at work. We can supply petrol to Sri Lanka at very high competitive prices. When we started oil exploration in 1970s, we started in the South Sudan area. We continue to discover deposits in our areas and Khartoum now has more oil. Chinese, Malaysian engineers are already exploring and discovering new deposits using latest satellite technology. In fact, we have discovered that Sudan is on top of a huge lake of petroleum and now realise only Saudi Arabia has bigger deposits than us in world crude! Our crude is so pure that we produce and export mostly petrol, not diesel,” said Ambassador El Talib.

He added: “If the Government of Sri Lanka or any Lankan companies want to purchase Sudanese petrol of purity, we are ready to supply at very competitive prices. What is more important is that, if they can invest in Sudan oil exploration, purchase oil exploration blocks and can extract oil and directly export from Sudan, we will support them. We invite your Government and your private sector companies to take part in the regular auctions by our Ministry of Petroleum. What I am saying is, if Sri Lanka wants to create its own petroleum, you can come to Sudan, get the oil block from us for which we can help, pump it out and bring the entire amount directly to Sri Lanka – we will help you to do that at highly competitive rates if possible. We already have Chinese, Malaysian and India based firms exploring, producing and exporting their ‘own oil’ and sending them directly to their countries! Of course, prices could be based on international rates as well. When oil prices return to normal range by the end of this year, we Sudan will become a net oil exporter. I invite Minister Bathiudeen to join the forthcoming Sudan Industry Conference in Khartoum this July where we can hold bilateral discussions. We are keen for a Preferential Trade Agreement with Sri Lanka and we can discuss oil, other trade cooperation and include these in such a new Agreement.”

At least three companies continue to prospect oil in six Sudani fields while more than 25 firms are in distribution in the post-2011 secession of South Sudan, according to the Petroleum Ministry. Some of these firms are privately held, some others are government held while both government and private sector JVs also in operation. Sudan produces more than 120,000 barrels per day, earning more than $2 b in annual exports, and more than one billion crude barrel deposits have been identified in Sudan. 

Its light and sweet crude ‘Nile Blend’ is considered as a valuable brand in ‘light crude’ class, rating above 160 other well-known brands such as Saudi ‘Arab Light,’ British Petroleum’s ‘Plutonio’ and Iran’s ‘Iran Light’. The waxy ‘Nile Blend’ first arrived in world oil markets in 1999. China has been one of the leading buyers of Nile Blend.

Welcoming El Talib’s offers, Minister Bathiudeen stressed that Sudanese-Sri Lanka relations are historic. “As per the vision of leaders of the Unity Government, President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, we are planning large-scale industry and economic reforms and your petroleum offer can help us greatly in our energy needs. I need to discuss with these leaders in this regard. Sri Lanka is interested in taking part in the forthcoming Sudan Industry Conference. More importantly, it is time we renew trade in great volumes since the current bilateral trade is $ 2 million which is very low in comparison to the real potential. Bringing in petroleum can also help boost trade volumes. I also welcome a Preferential Trade Agreement with Sudan and look forward to discussions on this in our meeting in Khartoum.”

Republic of Sudan is Africa’s third largest oil producer. According to the Department of Commerce, Sri Lanka’s total trade with Sudan in 2015 stood at a nominal, mere value of $ 2.2 million with exports at $ 1.6 million. Sri Lanka’s major export items were tea and desiccated coconuts.

Many international oil producers are active in Sudan, creating their “own oil”. Among prominent active international producers is ONGC Videsh Ltd., owned by India’s Oil and Natural Gas Corp (ONGC).

Both Minister Bathiudeen and Amb El Talib also discussed other forms of development cooperation between the two countries during their 14 June meeting.