Against a backdrop of increasing pressure from human rights groups on oil majors in Sudan, another Western company has decided to pull out of the controversial African state. Sweden’s Lundin Petroleum has finalized the sale of its 40.3 percent working interest in oil block 5A, to Malaysia’s Petronas. The cash consideration payable at completion will be $142.5 million.
Despite accusations that oil exploration in Sudan is contributing to abuse against civilians and the displacement of the population, Lundin insists its motivations for the sale were strictly profit-driven. "We got a very good price which, based on Friday's share price, is the equivalent of almost half our market capitalization," said Lundin spokeswoman, Maria Hamilton in Reuters.
We intend to use the cash proceeds to further develop Lundin Petroleum’s production and reserve base through a continuation of our exploration and acquisition strategy, and we are currently actively reviewing a number of opportunities,” said President and CEO of Lundin Petroleum, Ashley Heppenstall.
Completion of the transaction is subject to various conditions including the Sudan Government and partner approvals and is expected to occur within 60 days.
Block 5A is located in the Muglad Basin in Southern Sudan and contains the undeveloped Thar Jath field which contains gross proven and probable oil reserves of 149.1 million barrels. Lundin Petroleum will retain its 24.5 percent in Block 5B in Southern Sudan.
Last month, Canada's Talisman Energy completed a long-awaited deal to sell its indirectly held interest in Sudan’s Greater Nile Oil Project to India’s ONGC Videsh for $1.2 billion. The sale of the shares was related to recent protests by the international community, including Amnesty International, that the company is indirectly contributing to human rights violations in Sudan.
Fighting between the forces of the Sudanese government, opposition forces and various local militias continues in the oil-rich regions of the country, lead to the feeling that Talisman should withdraw from the region. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
