UNCTAD

17th Africa OILGASMINE, Khartoum, 23-26 November 2015

Extractive Industries and Sustainable Job Creation

Local Content in the Petroleum Sector in the Republic of the Sudan

By

Dr. Mohamed Zayed Awad

Minister of Petroleum and Gas Republic of the Sudan

The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.

Jul 15th; 2014 1 of 51

An Overview

Dr. Mohamed Zayed Awad

Minister of Petroleum and Gas

Republic of Sudan

Ministry of Petroleum and Gas

Jul 15th; 2014 2 of 51

Petroleum Infrastructure in Sudan

Export Pipelines and Marine Terminals

1. Block 1,2&4 Pipeline is 1510 km, 28 inch, with 6

pump stations, a daily capacity of 500 thousand

barrels, and 1 Marine Terminal capable of

storing 1.8 million barrels

2. Block 3&7 Pipeline is 1472 km, 32 inch with 6

pump stations, a daily capacity of maximum 750

thousand barrels and 1 Marine Terminal capable

of storing 3 million barrels.

3. Block 6 Pipeline is 716 km, 24 inch with 6 pump

stations, a daily capacity of maximum 250

thousand barrels to Khartoum Refinery.

4. Total pipeline 3700 km with a capacity of 1.5

million barrels of oil per day and Marine

Terminal storage capacity of 4.8 million

barrels.

Central Processing Facilities (CPF)

1. Heglig CPF: 350 thousand barrels per day

2. Jabalyn CPF: 300 thousand barrels per day

3. Fula CPF: 200 thousand barrels per day

4. Total processing capacity: 850 thousand barrels

per day

Refineries

1. Khartoum Refinery: 95,000 BOPD (plans to

upgrade)

2. Obeid Refinery: 15,000 BOPD

3. Port Sudan Refinery : To be Refurbished

4. Total domestic refining capacity: 110,000 BOPD

Sudan has a Robust

petroleum infrastructure

Jul 15th; 2014 3 of 51

Operators

GNPOC

Petro-Energy

Staroil

Rawat

Petrodar

EPCC Asawer

Petrolines

Geophysical

Acquisition

BGC

Seismic

Processing

BPC

PMC/

O&M Centroid

Training

PTC

Crude Oil Sales and

Marketing

E&P Business Petroleum Services

Downstream

Business Enhanced

Oil

Recovery

Sudapet

as

Full-

Fledged

Operator

Refining Khartoum

Obeid

Port Sudan

Distribution

Business

Nile Petroleum

Gas for

Power

Generation

Gas to

Liquid

Alternate

Energy

Investment Vehicles:

Sudapet (Upstream) and

PETCO (Midstream)

3

Drilling NUS

ADF

Bring back value from the Value

Chain

Regulatory Body

(OEPA, DGD, GDES)

Private

Businesses

Jul 15th; 2014 4 of 51

Methods for Injecting Local Content

Joint Venturing

• Establish JVs with renowned technology providers

• Phase out foreign companies equity in JVs

Acreage

Operators

• Sudanization

Regulatory

Framework

• Preferential treatment accorded to local contractors

• JV requirement for certain industries

Knowhow and

Technology Acquisition

Bringing

back

value

Jul 15th; 2014 5 of 51

Exploration

– Comprehensively explore Sudan’s

sedimentary basins according to

ranked exploration prospects

– Aim for an exploration success rate

of 40% and a reserve target of 2.5

billion BBLs

– Appraise all existing gas

discoveries to achieve economic

break-even

– Appraise un-appraised oil

discoveries

Sudapet:

Investment

BGC:

Seismic

Acquisition

BPC:

Seismic

Processing

NUS

Drilling Services

Jul 15th; 2014 6 of 51

Development

– Fast track development of

existing discoveries

– Fast track development of

Gas trends

– Fast track appraisal and

development of Red Sea

offshore gas and condensate

Sudapet:

Investment

PLRS:

EOR Lab Services

Studies

NUS

Drilling Services

Asawer:

Field Facilities

Jul 15th; 2014 7 of 51

Production

• Production

– Implementation of IOR/EOR

– Facilities construction,

management and maintenance

Sudapet:

Investment

PLRS:

IOR studies

Asawer:

Field Facilities

NUS

Drilling Services

Centroid

PMC and O&M

Jul 15th; 2014 8 of 51

Transportation

–Optimize existing

pipelines

–Construct necessary tie-ins

–Facilities construction,

management and

maintenance

PETCO:

Investment

PLRS:

Studies

Petrolines:

Pipeline

Construction and

Operation

Centroid

PMC and O&M

Jul 15th; 2014 9 of 51

Downstream

– Iron ore reserve development in

South Kordofan, Khartoum, River

Nile and Red Sea states

– Optimize refining to “local market

requirement” as priority A and

“export requirement” as priority B

– Fertilizer plants may be constructed

to provide fertilizer for local

agricultural industry

– Gas-To-Liquid plant is already

under process to utilize flared gas to

produce liquid fuel types

– LNG businesses will be established

upon discovery of large enough

quantities

Sudapet

Khartoum and

Obied Refineries

Crude Oil

Markeitng

Gas to Liquids

Nile Petroleum

Jul 15th; 2014 10 of 51

Petroleum Services

• Sudanese Companies to focus on high value Projects to

bring back value from the value chain

• Strategic services such as EOR services, drilling etc…

to be domesticated

• Service providers to act as “training vehicle”

• Provide legislative framework to cater for local content

in petroleum services

Jul 15th; 2014 11 of 51

Electrical Engineering 723

Mechanical Engineering 712

Petroleum Engineering 513

High Secondary School 330

Geology 296

Chemical Engineeing 231

Finance Accounting 203

Others (Interior Design, Tourism, Secretary, Press & Media 184

Bussines Administration 133

Technical School 132

Civil Engineeing 123

Computer Science 113

Economics 87

Medical Sciences 51

Commercial 43

Law 41

Arts-English Language 35

Political Science 34

Organization Managment 32

Architecture 31

Lab Science 27

Information Technology 24

Surveying Engineeing 23

Aviation 22

Agricultural Economy 21

Miliatry College 21

Total 4185

Human Resources

Sudan’s Upstream Business: an example of successful local

content policy in human resources

Sudanization by

Quality

Over 95%

of

positions

Sudanized

Jul 15th; 2014 12 of 51

Regulatory Framework

• Preference given to local

contractors in certain services

• Quoted price margins for

local contractors in tenders

• Sudanization of positions held

by expatriates in petroleum

operating companies

• Development of manpower in

Sudapet and service providers

EPSA

Sudanization

Petroleum Wealth

Act

Local Content

Policy

Jul 15th; 2014 13 of 51

Challenges

Brain Drain

• Gulf represents attractive market

• Sudanese are now a target of IOCs to work in gulf states

• New emerging markets e.g. Iraq

Sanctions

• Smaller number of technology providers

• Importation of equipment and payment for services are grave challenges

Overcome by:

Better remuneration

Better education

Overcome by:

R&D

Domestication of

services

Jul 15th; 2014 14 of 51

Thank You

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