local content in the petroleum sector in the republic...
TRANSCRIPT
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)
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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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