September 29, 2010 / 2:19 PM / 9 years ago

Sudan to drill 11 new oil wells for $166.5 mln

KHARTOUM (Reuters) - Sudan awarded four contracts worth $166.5 million to build 11 new rigs in the PetroDar Blocks 3 and 7 in the southeast Melut basin producing the heavier Dar Blend, the ministry said on Wednesday.

Workers set up an oil rig near the coast on the outskirts of Havana, Cuba, May 24, 2010. REUTERS/Desmond Boylan

Sudan is hoping to increase production in PetroDar, a joint venture between Chinese CNPC and SINOPEC, Malaysia’s Petronas and the Emirati al Thani Corporation, part of a plan targeting production of 1 million barrels per day of crude within three years, up from about 470,000 bpd.

The Sudanese Petroleum Ministry said in a statement sent to Reuters on Wednesday that the Great Wall Drilling Company, a subsidiary of CNPC, would build five rigs for $75.5 million.

Another four rigs would be erected by ZPEB, a subsidiary of SINOPEC for $63.3 million. Dindir Petroleum, a joint Sudanese and Chinese venture, would build one rig for $12.1 million and Sudanese oil services company Petroneed will build one for $15.6 million.

The statement said the drilling contracts were for two years from February 2010.

Sudan’s hopes to lift production rest largely on new finds and increasing the efficiency of its oil recovery from current fields.

The budding oil producer has struggled to extract its crude with U.S. economic and trade sanctions imposed since 1997 and difficult rocky or swampy terrain proving a challenge for the mostly Asian companies working in the country.

France’s Total is the only major European or U.S. firm with a large stake in Sudan’s oil sector but it has been reluctant to begin work ahead of a looming referendum for the south of Sudan to become an independent country due on January 9, 2011.

Most of Sudan’s estimated 6 billion barrels of oil reserves lie in the south and the north and south who ended decades of civil war with a 2005 peace deal have yet to agree on how to move forward on joint oil production post referendum.

Most analysts believe the south will secede.

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