VZCZCXRO6091
PP RUEHROV
DE RUEHKH #2174 2531342
ZNR UUUUU ZZH
P 101342Z SEP 06
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC PRIORITY 4467
INFO RUCNIAD/IGAD COLLECTIVE

UNCLAS KHARTOUM 002174 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR AF/SPG, AF/EPS, EB/IFD and EB/ESC 
PLEASE PASS TO USAID FOR AFR 
 
E.O. 12958:  N/A 
TAGS: EPET EAID PREL SU
SUBJECT: NORWEGIAN OIL ADVISOR IN SUDAN 
 
REF: KHARTOUM 1921 
 
¶1. (SBU) Summary: Recently arrived Norwegian petroleum consultant 
Einar Risa met with Emboff and provided an overview of his work in 
Sudan. Risa is interested in coordinating with other donors. He 
provided some details of sales of Sudanese oil, mentioned some 
technical problems with production from new fields, and confirmed 
that shipments of oil from Blocks 3 and 7 began in late August. End 
summary. 
 
---------------------------------- 
Norwegian Sponsored Oil Consultant 
---------------------------------- 
 
2.(U) Econ Officer met with Mr. Einar Risa, a Norwegian petroleum 
consultant, on August 31.  Risa has been hired by the Norwegian 
government to advise the GNU and GOSS on petroleum matters.  Risa 
outlined his main objectives as:  understanding how the petroleum 
sector works, advising on how Norway can become involved, and, 
acting as an advisor to help in any way possible. He wants to 
coordinate his work with the efforts of other donors, in particular 
the U.S. 
 
¶3. (U) While Risa is new to Sudan, he has experience in advising in 
a similar capacity in East Timor.  He has also worked as a Norwegian 
diplomat and in industry, with the Norwegian oil company Statoil. 
Risa said that his initial working assumption is that Sudan could 
use advice on policy and legal structure and on exploration. He 
suggested that if U.S. sanctions were not a factor, there would be 
opportunities for U.S. firms to provide consulting services to 
Sudan.  His initial impression is that the oil industry executives 
and government officials in Khartoum have considerable experience 
and are in general competent.  Officials in the South have much less 
experience. 
 
-------------------------------------- 
Petrodar's Heavy Oil Shipped in August 
-------------------------------------- 
 
¶4. (SBU) Risa provided some general information on the Sudan's 
petroleum sector.  He noted that the intention is to export two 
grades of oil from Sudan.  The production from the Greater Nile 
Operating Petroleum Consortium (GNOPC) is sold as Nile blend, which 
has fetched an average price $62 per barrel in the past month.  The 
production from the Petrodar consortium, which is just coming 
on-stream now, will be sold as Dar blend, and will probably sell at 
$10 discount to the benchmark price.  Risa stated that the first 
shipment of Petrodar's production was shipped in late August.  The 
initial shipment was heavier than the planned Dar blend.  He noted 
some of the technical problems involved handling the output, due to 
the very heavy character of the Petrodar production.  The oil 
currently being produced is so viscous it requires heating or mixing 
with a solvent to be pumped through the pipeline.  Risa said that as 
production from other fields in Blocks 3 and 7 comes into production 
it will be blended to create the Dar blend. 
 
¶5. (SBU) Commenting on the figures provided by the government on oil 
revenues (reftel), Risa said that his initial review of the figures 
leads him to believe the figures for administrative costs and 
transportation are high.  He had looked at the transportation costs 
and found that the attribution of costs for pipeline was done on a 
basis that was typical in the industry, but the figures were on the 
high side.  Risa said that sales of Sudan's production are currently 
done by the Ministry of Energy and Mining, with sales conducted by 
bidding for lots.  In Risa's opinion, while this is not a bad 
system, it may not maximize revenue.  Risa said that his preference 
would be for the separation of policy and operations, thus he would 
suggest that the sales be handled by the state oil company, while 
the Ministry of Energy and Mining restricts itself to policy. 
 
¶6. (U) When asked what the U.S. Government could do to assist in the 
petroleum sector, Risa suggested that USAID could help by offering 
training in the U.S. for personnel in the petroleum sector. 
 
HUME