Monday, March 2, 2009

Sudan investors wary of war crimes case

By Andrew Heavens

KHARTOUM, Feb 22 (Reuters) - Investors are delaying projects in Sudan because of uncertainty over the outcome of a looming war crimes case against its president, the country's energy and mining minister said on Sunday.

Judges from the International Criminal Court are currently deciding whether to issue an arrest warrant for Sudan's President Omar Hassan al-Bashir on charges he masterminded genocide and other atrocities in the country's Darfur region.

Energy Minister Al-Zubeir Ahmed al-Hassan said the global court's case has already hit investor confidence, despite Sudan's key oil industry showing signs of continued growth.

"Big investors all over the world will be waiting to see how the ICC will go," he told Reuters in an interview at the ministry building on the banks of the River Nile. 

"The wait-to-see environment is not positive for Sudan. It is harming Sudan."

The minister, who did not give examples of delayed investments, said it was too early to say how the ICC decision would specifically hit the oil industry, which last year provided more than 60 percent of Sudan's revenues.

Sudan was expected to produce an average of 540,000-550,000 barrels of oil a day in 2009, "ending the year with something nearer to 600,000", he said.

Growth would come primarily from recent expansions to fields in Sudan's oil blocks 7 and 3, run by a consortium headed by state-owned China National Petroleum Corp (CNPC).

The blocks in the southeast of the country would become even more lucrative, said the minister, with the opening of the new Qamari oil field, due in March.

There were also hopes of new discoveries across Sudan, he added, particularly in blocks 8, 11 and a separate site in the north of block 7, where recent drilling or seismic work have shown promise.

Sudan was also due to start its first offshore drilling operation in the Red Sea by the end of the year, he added, in a block run by a coalition dominated by Malaysia's state oil firm, Petronas.



SANCTIONS 

The country's largely oil-fired economy has been hit hard by the recent falls in energy prices, caused by the global financial slowdown.

Wide-ranging trade sanctions, which the United States has imposed on Sudan since the 1990s, have already weighed on the price Sudan can get for its oil, say traders, particularly its hard-to-sell acidic Dar Blend crude.

U.S companies are banned from doing business with Africa's biggest country and Sudan is also barred from using U.S. technology and equipment -- although China and other investors have been quick to make up the shortfall.

"We don't know if (the ICC arrest warrant) will happen and, if it happens, how the international community is going to go with this," said Al-Zubeir. 

"There are already sanctions in many areas ... We don't know if this will go to another stage of U.N. sanctions."

Sudan had long-terms plans to develop solar, wind and, eventually, nuclear power to bring cheap energy to some of its most remote regions, the minister said.

The nuclear plans were still in the early planning stage and the country was hoping to receive guidance from the International Atomic Energy Agency, he said.

But Sudan had already started importing solar technology from China and India and was planning a study on possible sites for wind farms, he added.