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Sudan sees new oil refinery contract award soon

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Awad Al Jaz

CAIRO, Dec 11 (Reuters) - Sudan’s oil minister said on Saturday he hoped to award a contract for a new 100,000 barrel-per-day (bpd) refinery at the country’s main port in two months.

Awad Ahmed al-Jaz also told reporters in Cairo that new exploration could help boost oil output beyond the 500,000 bpd expected to be hit in August. Current oil production stands at about 300,000 bpd.

"We are going on with exploration in new blocks, like block 9, 8 and C ... and we just signed an agreement on block 11," he said, adding that an award for block 15 was expected by the start of January.

Jaz said he hoped output could hit about 1 million by the end of 2006. "That’s my hope ... We hope we can hit that or more than that," he said.

Analysts have been more conservative than Sudan about the prospects for swift output growth, though they have predicted significant production increases over the coming years. Sudan is also seeking to expand its refining capacity. Jaz said a Chinese firm was expanding the capacity of a refinery in Khartoum to 100,000 bpd, from the current capacity of 70,000 bpd. Sudan also has a 20,000 bpd refinery in Port Sudan.

"Now we are negotiating on building a new refinery in Port Sudan with capacity of 100,000 bpd. We have a number of companies who are negotiating with us," he said, adding that the list included Indian, Malaysian and European firms.

Asked when he expected an award, he said: "Hopefully in two month’s time we will conclude that."

He said the project was worth "$700 million plus", adding that some bidders were offering finance.

Jaz said he was not worried that plans to expand the country’s oil industry would be disrupted because of threatened sanctions over Sudan’s Darfur conflict. The Sudanese government felt that international pressure was diminishing, he added.