About Sudan

Location: Northern Africa, bordering the Red Sea, between Egypt and Eritrea

Geographic coordinates: 15 00 N, 30 00 E

Map references: Africa

Area: 2,505,810 sq km

Area comparative: Slightly more than one-quarter the size of the US

Land boundaries: 7,687 km

Border Countries: Central African Republic 1,165 km, Chad 1,360 km, Democratic Republic of the Congo 628 km, Egypt 1,273 km, Eritrea 605 km, Ethiopia 1,606 km, Kenya 232 km, Libya 383 km, Uganda 435 km

Coastline: 853 km

Climate: Tropical in South; Arid desert in North; Rainy season (April to October)

Terrain: Generally flat, Featureless plain; Mountains in East and West

Elevation extremes: Lowest point - Red Sea 0 m. Highest point: Kinyeti 3,187 m

Natural resources: Petroleum; Small reserves of iron ore, copper, chromium ore, zinc, tungsten, mica, silver, gold

Irrigated land: 19,460 sq km (1993 est.)

Natural hazards: Dust storms

Geography Note: Largest country in Africa; Dominated by the Nile and its tributaries

Business and Economy

Investment in Sudan has witnessed remarkable progress in terms of efficiency, performance and investment laws. Investment laws are in continuos improvement and amendment since first Investment Encouragement Act of 1956 till the new Act of 1999.

Efforts has gone far to streamline and simplify project approval and procedures and by identifying projects by providing preliminary feasibility and final feasibility studies. Free Zone areas were created in Suakin (600 square km) in the Red Sea coast, and in Khartoum North. Bonded warehouses were allowed in all parts of the country.

 Investments in Sudan:

• Cheap labour.

• Availability of raw materials, land, water.

• Liberalisation of market, removing price controls, currency floating.

• Big market (ten countries neighbouring) + 29 million Sudanese.

• Member of COMESA (Common Market for East & South Africa) with tax reductions and preference, ACP groups, new grand Arabs free trade area under progress & LDC member with preferences in EU and world markets.

• Skilled labour, 22 universities research institutions(Agriculture, Animal Resource, Industrial Research & Consultant food research centre, health research & training ... etc.)

OIL
Sudan contains proven reserves of 563 million barrels of oil, more than twice the 262 million barrels estimated in 2001. Because much of Sudanese oil exploration has been limited to the central and south-central regions, Sudanese Energy Ministry representatives estimate proven reserves at 700 million barrels and total reserves at five billion barrels, including potential reserves in northwest Sudan , the Blue Nile Basin , and the Red Sea area in eastern Sudan . Oil production has risen steadily since the completion of an export pipeline in July 1999. Crude oil production averaged 343,000 barrels per day (bbl/d) in 2004, up from 270,000 bbl/d during 2003. In December 2004, Sudanese Energy Minister Awad al-Jaz announced that oil production will likely increase to 500,000 bbl/d in 2005. Sudanese production may reach 750,000 bbl/d by late 2006 if increases in output progress as planned.

Exploration and development of Sudan 's oil resources has been highly controversial. International human rights organizations have accused the Sudanese government of financing human rights abuses with oil revenues, including the mass displacement of civilians near the oil fields. Factional fighting in the South and rebel attacks on oil infrastructure have kept oil production and exploration from reaching full potential to date. In October 2004, for example, the Sudanese government prevented a militia attempt to sabotage the country's main oil export pipeline.

The recent peace agreement between the government and the SPLA will likely lead to substantial investment in both production facilities and new exploration initiatives in the country. In January 2005, after the official signing of the CPA, Total SA, Marathon Oil Corporation, and the Kuwait Foreign Petroleum Company renewed their exploration rights in southern Sudan .

Greater Nile Oil Project
In 1996, Canadian independent Arakis Energy (Arakis) began development of the Heglig and Unity fields (Blocks 1, 2, and 4), estimated to contain recoverable reserves of 600 million to 1.2 billion barrels. Because the fields were not located near the Red Sea coast, Arakis entered into a consortium with the Greater Nile Petroleum Operating Company (GNPOC) to raise investment for a 994-mile pipeline from the fields to the Suakim oil terminal near Port Sudan. In September 1999, the first cargo of "Nile Blend" crude departed the export terminal. Although the pipeline from the fields to an export terminal near Port Sudan was originally built to move 150,000 bbl/d, its capacity reportedly can be expanded to 450,000 bbl/d. In January 2005, GNPOC reported production of 325,000 bbl/d from Blocks 1, 2, and 4.

In March 2003, Talisman sold its stake in GNPOC (acquired through its purchase of Arakis) to India's national oil company, ONGC Videsh, due to pressure from human rights organizations. In August 2004, ONGC agreed to facilitate Sudan's purchase of the 25% stake. ONGC also plans to give Sudapet a two percent stake in Block 5A and a one percent stake in Block 5B.

Other Fields
In June 2004, Petrodar, a consortium of the China National Petroleum Corporation (CNPC) (41%), Petronas (40%), Sudapet (8%), Gulf Oil Petroleum (6%), and the Al-Thani Corporation (5%) awarded a $239 million contract to Malaysia 's Ranhill International and Sudan 's Petroneeds Services International for development work on blocks 3 and 7. The blocks contain the Adar Yeil and Tale fields, anticipated to come online in 2005 with a combined capacity of 200,000 bbl/d. Capacity is expected to increase to 300,000 bbl/d by late 2006. Construction will include a 300,000 bbl/d central processing facility at Al-Jabalayan, production facilities at Palogue, and a pipeline linking the two. CNPC's Block 6 also came online in November 2004 at a rate of 10,000 bbl/d, expected to eventually reach 170,000 bbl/d.

In October 2004, Malaysian Peremba began construction of a $232 million marine export terminal for the Melut Basin Oil Development Project. The terminal, scheduled for completion in December 2005, will have a capacity of 2 million bbl/d. Malaysia's Nam Fatt and Italy's Bentinin have been contracted to build six pumping facilities in the basin by April 2006. Construction on a 870-mile pipeline linking the Melmut Basin to the export terminal near Port Sudan has been divided into four parts, with separate consortias to undertake each of the segments. In July 2004, a consortium led by MMC Corporation was contracted to build a 304-mile portion, scheduled for completion in May 2005. In August 2004, Russian Stroitransgas began construction on a 227-mile section, which it expects to complete within 12 months.

New exploration activity recently commenced in several regions of Sudan . In June 2004, oil exploration began for the first time in northern Sudan , on Block 9 in the Jazira region north of Khartoum . Exploration drilling in the Nile Valley 's al-Damir began in November 2004.

Refining
Sudan has been self-sufficient in producing all petroleum products except aviation fuel since the June 2000 opening of the Khartoum Oil Refinery. The Khartoum refinery, built and operated by CNPC, produces benzene and butane gas for domestic consumption and export, as well as gasoline for local consumption. Although the Khartoum refinery has a named crude refining capacity of 50,000 bbl/d, this reportedly increased to 70,000 bbl/d in June 2004.

The Port Sudan facility, located near the Red Sea, is Sudan's smallest refinery and has a current capacity of 21,700 bbl/d. In November 2004, the Sudanese government announced plans to expand its refining capacity by upgrading facilities at Khartoum and Port Sudan, giving them capacities of 100,000 bbl/d each, by primarily capitalizing on CNPC's $340 million injection into the Khartoum refinery in September 2003.

In August 2004, ONGC agreed to invest $200 million in a 460-mile Sudanese pipeline in return for payment in crude oil. The pipeline will have a capacity of 18,330 bbl/d and transport gas, oil, and gasoline from the Khartoum refinery to Port Sudan. Completion is expected in October 2005.

In addition to refineries at Khartoum and Port Sudan, the country has two other refineries -- El Gily, with a capacity of 50,000 bbl/d; and El Obeid, with a capacity of 10,000 bbl/d.

ELECTRICITY
Sudan 's electricity sector is plagued by poor infrastructure and frequent outages. Sudan has 728 megawatts (MW) of electricity generation capacity, and the country's total electricity generation was 2.4 billion kilowatthours (kwh) in 2002. The country's main generating facility is the 280-MW Roseires dam located on the Blue Nile river basin, approximately 315 miles southeast of Khartoum . The facility comes under frequent attack by rebel groups, and low water levels often cause its output to fall to 100 MW.

Electricity is transmitted through two interconnected electrical grids -- the Blue Nile Grid and the Western grid -- which cover only a small portion of the country. Regions not covered by the grid rely on small diesel-fired generators and wood fuel for power, although blackouts and brownouts are common. Only 30% of Sudanese currently have access to electricity, but the government hopes to increase that figure to 90% in coming years. In June 2004, Sudanese Electricity Minister Ali Tamim Fartak said that Sudan has secured more than $2 billion of the estimated $3 billion necessary to meet that goal.

Several projects are underway to increase Sudanese generating capacity. The largest include the proposed 2,500-MW Merowe and 300-MW Kajbar hydroelectric facilities in northern Sudan. France's Alstom, China's Harbin Power, and several Arab investors have contributed funding to construction of the Merowe facility, which is scheduled for completion in July 2008. China is financing 75% of the $200 million Kajbar dam construction, with Sudan providing the remaining 25%. Environmental groups have expressed concern about the Kajbar project, citing potential damage to the Nile ecosystem and the culture of displaced Nubian residents of the area.

In addition to the Merowe and Kajbar facilities, in June 2004, Sudan inaugurated two electric power stations located north of Khartoum, estimated to have a combined capacity of 330 MW. In November 2004, Sudan's first independent power production (IPP) project also went onstream. Located near Khartoum, the 257-MW diesel plant sells output to the state-owned Sudan Electricity Corporation (SEC). Several additional power stations with a total capacity of 700 MW are scheduled for completion before 2008.

Foreign investment in the Sudanese power sector is expected to increase with the cessation of the recently-ended civil war. In June 2004, for example, the United Arab Emirates (UAE) pledged to invest in the Sudanese power sector following the signing of a peace accord.

Sources for this report include: Africa Intelligence; Africa Oil and Gas; Agence France Presse; CIA World Factbook 2004; CountryWatch.com; Economist Intelligence Unit ViewsWire; Factiva; Global Insight; International Market Insight Reports; International Monetary Fund; MBendi; Panafrican News Agency; Petroleum Economist; Petroleum Intelligence Weekly; Reuters News Service; Suna News Agency; U.S. Energy Information Administration; World Bank; World Markets Research Centre.

COUNTRY OVERVIEW
President: Lt. Gen. Umar Hassan Ahmad al-Bashir (since 1989)
Independence: January 1, 1956 (from Egypt and the United Kingdom)
Population (7/04E): 39.1 million
Location/Size: Northern Africa, bordering the Red Sea between Egypt (on the north); Eritrea and Ethiopia (on the east); Kenya, Uganda and the Democratic Republic of Congo (on the south); and Libya, Chad and the Central African Republic (on the west) / 2,505,810 square kilometers (967,000 square miles), slightly larger than the combined size of Texas, New Mexico, Arizona, Nevada, California, Oregon, and Washington
Major Cities: Khartoum (capital), Juba, Kassala, Medani, Nyala, El-Obeid, Omdurman, Port Sudan
Languages: Arabic (official), Nubian, Ta Bedawie, diverse dialects of Nilotic, Nilo-Hamitic, Sudanic languages, English
Major Ethnic Groups: Black (52%), Arab (39%), Beja (6%), Foreigners (2%), Other (1%)
Religion: Sunni Muslim (70%, in north), indigenous beliefs (25%), Christian (5%, in south)

ECONOMIC OVERVIEW
Finance Minister: Ahmed Hassan al-Zubeir
Currency: Sudanese dinar (SDD)
Market Exchange Rate (2/1/05): US$1 = 255.3 SDD
Nominal Gross Domestic Product (GDP) (2004E): $20.7 billion
Real GDP Growth Rate (2004E): 6.5% (2005F): 6.2%
Inflation Rate (2004E): 8.6% (2005F): 6.9%
Current Account Balance (2003E): -$727 million
Major Trading Partners: China, Japan, Saudi Arabia, South Africa, India, UK, Germany, Indonesia, Australia
Merchandise Exports (2003E): $2.4 billion
Merchandise Imports (2003E): $2.7 billion
Merchandise Trade Balance (2003E): -$0.3 billion
Major Export Products (2003): Crude oil, sesame, livestock, cotton, gum arabic
Major Import Products (2003): Machinery and equipment, manufactured goods, oil products, transport equipment, chemicals, wheat
Total External Debt (yearend, 2003E): $24.2 billion

ENERGY OVERVIEW
Minister of Energy and Mining: Awad Ahmad al-Jaz
Proven Oil Reserves ( Oil and Gas Journal ; 1/1/05E): 563 million barrels
Crude Oil Refining Capacity ( Oil and Gas Journal ; 1/1/05E): 121,700 barrels per day (bbl/d) at three Refineries: El Gily (50,000 bbl/d); Khartoum (50,000 bbl/d); Port Sudan (21,700 bbl/d)
Oil Production (2003E): 271,000 bbl/d (2004E): 343,000 bbl/d
Oil Consumption (2004E): 91,000 bbl/d
Net Oil Exports (2004E): 252,000 bbl/d
Natural Gas Reserves ( Oil and Gas Journal ; 1/1/05E): 3 trillion cubic feet (tcf)
Natural Gas Production (2002E): None
Natural Gas Consumption (2002E): None
Electric Generation Capacity (2002E): 728 megawatts (55.6% thermal, 44.4% hydroelectric)
Electricity Generation (2002E): 2.4 billion kilowatthours (kwh)
Electricity Consumption (2002E): 2.4 billion kwh

ENVIRONMENTAL OVERVIEW
Minister of Environment and Urban Planning: Maj. Gen. Adam al-Tigani Tahir
Total Energy Consumption (2002E): 0.15 quadrillion Btu* (<0.1% of world total energy consumption)
Energy-Related Carbon Dioxide Emissions (2002E): 8.6 million metric tons (<0.1% of world total carbon dioxide emissions)
Per Capita Energy Consumption (2002E): 4.5 million Btu (vs. U.S. value of 339.1 million Btu)
Per Capita Carbon Dioxide Emissions (2002E): 0.26 metric tons (vs. U.S. value of 20.0 metric tons)
Energy Intensity (2002E): 2,319 Btu/$nominal -- PPP (vs. U.S. value of 9,348 Btu/$nominal)**
Carbon Dioxide Intensity (2002E): 0.13 metric tons of carbon dioxide/$nominal (vs. U.S. value of 0.55 metric tons/$ nominal)**
Fuel Share of Energy Consumption (2002E): Oil (91.1%), Hydroelectricity (8.7%)
Fuel Share of Carbon Emissions (2002E): Oil (100.0%)
Status in Climate Change Negotiations: Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified November 19th, 1993 ). Not a signatory to the Kyoto Protocol.
Major Environmental Issues: Inadequate supplies of potable water; wildlife populations threatened by excessive hunting; soil erosion; desertification; periodic drought
Major International Environmental Agreements: A party to Conventions on Biodiversity, Climate Change, Desertification, Endangered Species, Law of the Sea, and Ozone Layer Protection.

LINKS
Embassy of the Republic of Sudan
BBC Country Profile: Sudan
Human Rights Watch: "Sudan, Oil and Human Rights"
Washington Post World Reference: Sudan
Arab Net: Sudan
Sudan.Net
Darfur Information Center
Latest News from Sudan at Sudan.net

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