India’s ONGC files arbitration claim against Sudan over unpaid oil dues

India’s Oil and Natural Gas Corp’s acquired a 25 percent stake in the Greater Nile Oil Project in Sudan in 2003. (Reuters)
Updated 17 April 2018
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India’s ONGC files arbitration claim against Sudan over unpaid oil dues

NEW DELHI: The foreign acquisition unit of India’s Oil and Natural Gas Corp’s (ONGC) has filed an arbitration claim against the government of Sudan in a London court, a company official said, seeking to recover dues pending for years from a project hit by the breakaway of South Sudan in 2011.
People familiar with the matter in India and Sudan said ONGC had filed a claim for $98.94 million, in what they said was a first for the South Asian nation’s top oil and gas explorer against any government. They declined to be identified because they weren’t authorized to discuss the matter with media.
At the center of the dispute is ONGC’s 25 percent stake the company acquired in the Greater Nile Oil Project (GNOP) in Sudan in 2003. Other stakeholders include China’s China National Petroleum Corp. with a 40 percent stake and Malaysia’s Petronas with a 30 percent share.
“Yes, we have filed an arbitration as our dues have been pending for years,” said N. K. Verma, managing director of ONGC Videsh Ltd. (OVL). “Notwithstanding this arbitration we will continue to work with Sudan going forward,” he said, declining to provide details on the timing and location of any hearings, or the amount being sought.
The current arbitration is only for a part of pending dues that add up to about $425 million, sources said, adding ONGC has sued the government as the contracts were backed by sovereign guarantees.
ONGC will also file arbitrations for the remaining outstanding amount in due course, said a company official, who declined to be identified.
Officials in Sudan said contacts and negotiations with ONGC were being lined up.
“We have addressed the company (ONGC) to show our commitment to serious negotiation and we (have) set up a committee to determine the time frame to pay back the sum in installments,” said Bekheet Ahmed Abdullah, under-secretary for Sudan’s Petroleum Ministry.
OVL’s stake in the Greater Nile Oil Project comprised Blocks 1, 2 and 4, and the firm also agreed to build a 1,500-kilometer pipeline to Port Sudan on the Red Sea. But in 2011 South Sudan broke away from Sudan, after decades of civil war, and took control of blocks 1A, 1B and a part of block 4.


Saudi Aramco in talks for stake in world’s no. 4 chemical firm

Updated 19 July 2018
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Saudi Aramco in talks for stake in world’s no. 4 chemical firm

  • Aramco made the invitation for the SABIC deal to the banks last month
  • The oil giant is expanding its footprint globally by signing downstream deals and boosting the capacity of its plants

DUBAI: Saudi Aramco said on Thursday it is looking to buy a stake in Saudi petrochemical maker SABIC, a move that could boost the state oil giant’s market valuation ahead of a planned initial public offering.
Aramco said in a statement that it was in “very early-stage discussions” with the Kingdom’s Public Investment Fund to acquire the stake in SABIC via a private transaction. It has no plans to acquire any publicly held shares, it said.
In a separate statement, the PIF also said that talks about a sale were in early stages. “There is a possibility that no agreement will be reached in relation to this potential transaction,” it said.
Reuters reported on Wednesday that Saudi Aramco had invited banks to pitch for an advisory role on the potential acquisition of a strategic stake in Saudi Basic Industries Corp, citing two sources with direct knowledge of the matter.
Aramco wants to develop its downstream business as the government prepares to sell up to 5 percent of the world’s largest oil producer, possibly by next year. Boosting its petrochemicals portfolio further could help attract investors for the IPO.
Riyadh-listed SABIC, the world’s fourth-biggest petrochemicals company, is 70 percent owned by the Public Investment Fund (PIF), Saudi Arabia’s top sovereign wealth fund. It has a market capitalization of 385.2 billion Saudi riyals ($102.7 billion).
The Aramco IPO is the centerpiece of an ambitious plan championed by Crown Prince Mohammed bin Salman to diversify Saudi Arabia’s economy beyond oil.
Aramco made the invitation for the SABIC deal to the banks last month, said the sources, declining to be identified due to commercial sensitivities.
Aramco plans to boost investments in refining and petrochemicals to secure new markets for its crude, and sees growth in chemicals as central to its downstream strategy to lessen the risk of a slowdown in oil demand.
The oil giant is expanding its footprint globally by signing downstream deals and boosting the capacity of its plants.
Aramco’s push into chemicals also includes a mega project it is building at home with SABIC. The $20 billion project would build a complex that converts crude oil into chemicals directly, bypassing the refining stage.