By an OGJ correspondent
NICOSIA, Feb. 5 -- Talisman Energy Inc., Calgary, announced a delay in the sale of its 25% interest in the Greater Nile Oil Project (GNOP) to New Delhi-based ONGC Videsh Ltd.
Talisman has not set a new date for the expected sale, but officials expressed confidence the agreement with ONGC Videsh would be acceptable to the other members of the consortium.
"The Government of Sudan has approved the transaction, and we believe it will happen," Talisman spokesman Barry Nelson told OGJ. "Our earlier forecast dates for completion were optimistic, so we are not setting another deadline."
Sudanese Oil Minister Awad Al-Jaz said Monday that the $1.2 billion sale should be completed within days.
"It's on the right track," said Al-Jaz, adding that Talisman's partners are expected to give their approval for ONGC Videsh to take over the Canadian company's 25% share in GNOP.
Chinese National Petroleum Co. owns 40% of GNOP, which produces around 250,000 b/d of oil, with Malaysia's Petronas (25%) and state-owned Sudanese company Sudapet (5%) holding the remaining equity.
An industry source told OGJ Online that sale of Talisman's assets had been held up when an existing partner wanted to increase its stake in the project. He did not name which partner wanted the increased share.
Talisman announced its intention to sell last October, saying it expected the transaction to be completed by the end of 2002, subject to approvals.
"The completion of the transaction is subject to certain conditions, primarily relating to obtaining consents from the government of Sudan and the other consortium members and to the waiver of expiry of rights of first refusal," Talisman said.
Talisman's President and CEO Jim Buckee, on announcing the sale, said, "Talisman's shares have continued to be discounted based on perceived political risk in-country and in North America to a degree that was unacceptable for 12% of our production. Shareholders have told me they were tired of continually having to monitor and analyze events relating to Sudan."
The company had long defended its work in Sudan against media reports that its involvement in CNOP contributed to the country's on-going civil war, as well as to human rights abuses.
"It was a determined campaign carried out by important people in the UK and the US which sought to undermine Talisman's work in the region," one London-based observer of Sudan told OGJ Online. "The leaders of the campaign, many of them with missionary zeal, targeted large institutional investors in the hope of getting them to drop Talisman's shares."
Talisman acquired its operatorship and 25% interest in GNOP in October 1998 through the acquisition of Arakis Energy Corp. for about 8.9 million common shares of Talisman (OGJ, Oct. 19, 1998, p. 44). Talisman's acquisition provided an infusion of capital that enabled the consortium to complete a 930-mile pipeline to transport oil from fields in southern Sudan to an export terminal near Port Sudan on the Red Sea.
The pipeline began filling with crude in July 1999, and the first cargo of "Nile Blend" departed the export terminal in early September 1999. Originally constructed to move 150,000 b/d of oil, the pipeline has a current capacity of 250,000 b/d and can be expanded to 450,000 b/d.
