VZCZCXRO6740
OO RUEHROV RUEHTRO
DE RUEHKH #0869/01 2080447
ZNR UUUUU ZZH
O 270447Z JUL 09
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4148
INFO RUCNIAD/IGAD COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RHMFISS/CJTF HOA
RUEHTC/AMEMBASSY THE HAGUE 0051

UNCLAS SECTION 01 OF 02 KHARTOUM 000869 
 
DEPT FOR SE GRATION, S/USSES, AF A/S CARSON, AF/E 
NSC FOR MGAVIN 
DEPT PLS PASS USAID FOR AFR/SUDAN 
ADDIS ABABA ALSO FOR USAU 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ASEC PGOV PREL KPKO SOCI AU UNSC SU
SUBJECT: Sudan: Special Envoy Gration and CDA Whitehead visit Heglig 
Oilfield 
 
¶1. (U) On July 21 Special Envoy (SE) Gration and Charge (CDA) 
Whitehead visited Heglig oilfield, the field headquarters of the 
Greater Nile Petroleum Operating Company (GNPOC). Taking off from 
the regional capital of Kadugli, SE and his delegation were 
transported by helicopter over the lush rainy season savannah of 
South Kordofan to the GNPOC complex at Heglig, where a bevy of GNPOC 
officials led by Hamad Elneel Abdulgadir, Deputy Secretary General 
of the Ministry of Energy & Mining, were waiting to welcome the SE. 
 
 
¶2. (SBU) GNPOC Field Manager Ibrahim Yousif Gamil briefed the 
visiting delegation on the company's operations in an office complex 
still decorated with English language safety posters put up by 
Talisman of Canada, who initially constructed and managed the 
facility. Now a consortium led by China's CNPC (40%), Malaysia's 
Petronas (30%) and India's ONGC (25%), GNPOC operates the former 
Talisman concessions in Blocks 1, 2 and 4 of the Muglad Basin. 
According to Gamil, GNPOC commenced production in 1999 and has 
drilled nearly 600 wells across nine oil fields, of which 400 are 
still in production.  Total current output is 180,000 barrels per 
day of semi-sweet Nile Blend crude, Gamil said, down from a high of 
300,000. Gamil said that the blend, which currently markets above 60 
dollars a barrel, is of suitable quality out of the ground to run 
diesel generators without additional refining.  He added that GNPOC 
is seeking to slow the steady decline in production through new 
exploration, with seismic activity underway in several unexplored 
areas of the blocks.  Absent new finds, major production in the 
Heglig area will end by 2020. 
 
¶3. (U) SE Gration toured Heglig's Central Processing Facility (CPF), 
where crude oil is separated from water and sediment. Though the 
water cut varies from field to field, it presently averages over 
80%, according to Heglig CPF technicians. This excess water, which 
is contaminated with a significant amount of dissolved hydrocarbons, 
is filtered through a series of holding ponds as part of a natural 
treatment process.  The delegation visited the ponds, the last of 
which was filled with water grasses and even some fish.  GNPOC 
officials stated that they plan to use the treated water to grow a 
variety of commercially viable trees, including bamboo and mahogany, 
for the benefit the local community. The delegation stopped to tour 
a nursery that provides plants to local inhabitants, but the GNPOC 
Field Manager admitted that GNPOC's attempts at agricultural 
outreach had been stymied by nomadic herders, who were "not suited 
to farming." 
 
¶4. (U) SE Gration next visited the first of six pumping stations 
along GNPOC's 1,600 kilometer pipeline. According to pipeline 
technicians, the pipeline has a flow rate of 1,000 cubic meters per 
hour, and flows 24 hours a day.  It feeds approximately 75,000 b/d 
to domestic refineries in El Obeid and Khartoum, with the remainder 
exported through terminals in Port Sudan, primarily to East Asian 
and Indian markets.  Technicians explained that the pipelines are 
maintained through the use of pipeline inspection and cleaning tools 
('pigs') of both the normal and intelligent variety.  Normal pigging 
is carried out twice a month for cleaning purposes, while 'smart' 
pigs are used three times a month to inspect the pipeline. 
 
¶5. (SBU) Eager to show off their community development efforts, 
GNPOC officials took SE Gration on a tour of the impressive Heglig 
hospital, which offers completely free medical services to all 
comers. The hospital contains a general surgery ward, (surgeons 
rotate in from Khartoum for a two to four-week period as part of 
their national civil duty--most are professors in medical 
universities), for trauma cases, as well as routine procedures.  It 
also features an obstetrics and gynecology ward, a maternity clinic, 
pediatric care, laboratory and pharmacy. GNPOC officials noted that 
the free care attracts not only local nomadic herders, but patients 
"from all over the country... people come from as far away as Port 
Sudan and Darfur." 
 
¶6. (SBU) GNPOC officials said that they also promote community 
development through hiring local workers.  Though it is difficult to 
find skilled or semi-skilled workers in the area, the company 
nonetheless hires 140 local Misseriya and Dinka tribesman each per 
month on 30 day contracts and replaces them with new workers each 
month so that a maximum number of locals can benefit from GNPOC 
employment.  More broadly, GNPOC has nearly completed its 
"Sudanization" plan, with most positions filled by Sudanese, with 
the exception of senior management. This plan appears to have a 
distinct Northern bias, however.  A list of staff rotations observed 
by CDA in the Heglig office complex contained only 4 Southerners out 
of 37 names on the list. (Note: At one point other employees pulled 
 
KHARTOUM 00000869  002 OF 002 
 
 
aside members of the SE delegation to complain about austere working 
conditions and low pay ($500/week). End Note.) 
 
¶7. (SBU) Despite GNPOC's efforts at community development, company 
officials complained that relations with the local community remain 
problematic. Nomads continually cut down fencing around the 
oilfields to let their cattle through to graze, often to the 
detriment of their livestock, and have otherwise engaged in other 
minor forms of sabotage. "However, this is economically motivated 
and not political," stated Gamil.  Throughout the visit a contingent 
of Central Reserve Police accompanied the SE, but the delegation 
observed no other significant security forces or infrastructure. 
Asked about the impending announcement of the decision of the 
Permanent Court of Arbitration on Abyei, GNPOC officials proclaimed 
steadfast neutrality.  "We are not a political entity," said Gamil, 
"and we try to maintain good relations with all our neighbors." 
 
¶8. (SBU) Comment:  The tour of Heglig was not a Potemkin affair, and 
the GNPOC officials appeared to have little if anything to hide.  In 
line with its falling production, some of the oil facilities at 
Heglig are showing their age.  It appears that there has been only 
limited investment in upgrades or upkeep since the initial 
construction, especially in the Central Processing Facility. The 
lack of advanced technology required to prolong production may point 
to the end of major petroleum production in Heglig by the end the 
next decade, barring significant new finds, but in the meantime 
GNPOC seems to be managing a relatively efficient and ecologically 
sound operation. 
 
 
The Special Envoy has cleared this cable. 
 
 
 
WHITEHEAD