Sudan, India’s ONGC Settle Debt Issues

Sudan, India’s ONGC Settle Debt Issues

Thursday, 9 August, 2018 - 11:30
Sudan’s President Omar al-Bashir, Reuters
Khartoum – Saif Al Yazl Babkr
Sudan has reached an agreement with India’s Oil and Natural Gas Corp’s (ONGC) on Tuesday to settle the former’s debt of about $98 million.

The deal, signed by Sudan’s Minister of Oil and Gas Azhari Abdel-Gadir and ONGC in New Delhi, comes as part of an agreement Sudan signed with three major oil producers, Malaysia’s Petronas, China National Petroleum Corporation and ONGC to settle its overall debts of $22 billion.

“The settlement with the Indian company comes in context of an agreement between the oil ministry and the three main companies that have the largest share of Sudan’s market,” a Sudan oil ministry source confirmed to Asharq Al-Awsat.

The source added that both Chinese and Malaysian oil sector investors in Sudan agreed to the settlement, but the Indian company filed a lawsuit demanding its entitlements at a time when the country was suffering from a dire financial crisis.

Sudan’s economic strains come as a result of a crippling embargo and reduced oil production.

ONGC’s stake in the Greater Nile Oil Project (GNOP) comprised Blocks 1, 2 and 4, and the firm also agreed to build a 1,500-kilometre pipeline to Port Sudan on the Red Sea.

But in 2011 South Sudan broke away from Sudan and took control of blocks 1A, 1B and a part of block 4. Also, due to trade sanctions, Khartoum was unable to secure oil for its refineries and asked ONGC to sell its share of oil from blocks 1, 2 and 4.

Last April, ONGC filed an arbitration claim against the government of Sudan in a London court seeking to recover $98.94 million, pending for years from a project hit by the breakaway of South Sudan in 2011.

“Today, we have reached an agreement on all pending issues pertaining to financial claims between ONGC and the government of Sudan represented by the Ministry of Oil and Gas and Ministry of Finance and Economic Planning,” Abdel-Gadir told Sudan's official news agency SUNA.

However, the Sudanese minister didn’t elaborate on the nature of understandings under which the ONGC withdrew its arbitration claim against the Sudanese government.

According to press sources, the arbitration lawsuit filed by the Indian company was only related to part of entitlements which total about 425 million dollars. An ONGC official, who demanded anonymity, said ONGC would also file arbitration claims on the remaining amounts in due course.

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