CNPC has been present in Sudan since 1996 and now has oil and gas assets and interests in the country, while also providing oilfield services.
Oil and Gas Operations
CNPC's oil and gas businesses in Sudan mainly include the projects of Block 1/2/4, Block 3/7, Block 6, Block 15, the Khartoum Refinery, Khartoum Chemical I Co. Ltd. and the petrochemical trade, covering oil and gas exploration, development, production, storage and transportation, refining and chemicals and sales of refined products.
 Block 1/2/4
CNPC won the tender for the Block 1/2/4 project in August 1996 and it currently has a 40% holding. In April 1999, a crude oil pipeline linking Heglig Oilfield and Sudan Port was completed and put into operation. The pipeline is 1,506 kilometers long and has an annual delivery capacity of 12.5 million tons. The Heglig Oilfield was built and became operational in May 1999 with a daily output of 150,000 barrels. In 2007, Oil output from Block 1/2/4 in Sudan remained stable with a small increase. In the Neem In-depth research project for Block 1/2/4 in Sudan, our findings in low-resistance strata have added more than 2 million metric tons of oil in place to Neem Oilfield.
Block 3/7
CNPC won the tender for Block 3/7 in November 2000 and currently owns a 41% stake and is also the operator of this block.
In November 2002, a major oil and gas discovery was achieved in Palogue in Block 3/7. The Palogue Oilfield has a cumulative proven OOIP of more than 5 billion barrels and proven recoverable reserves of 956 million barrels. The 1,367-km long crude oil pipeline from Block 3/7 to Sudan Port was put into operation in July 2006. The oilfield produces 10 million tons of oil annually. The offshore terminal of the pipeline from the oilfield was completed and put into operation on June 9, 2007, increasing the field's daily deliverabivity to 200,000 barrels.
Block 6
CNPC acquired the Block 6 project in 1996 and currently has a 100% stake. Fula Oilfield was found in this block in 2001 and was put into production in March 2004, with a daily output of 10,600 barrels. In 2006, a significant exploration breakthrough was obtained in the Fula sag in Block 6, with an annual productivity of 2 million tons was achieved in June 2006. In 2007, our exploration discovered an additional 122 million barrels of oil in place, including 36 million barrels of recoverable reserves in the actic region of western Fula. Daily oil output remained at more than 40,000 barrels thanks to our active measures to stabilize oil production and control the water-cut.
Khartoum Refinery
The Khartoum Refinery is jointly invested in and constructed by CNPC and the Sudanese Ministry of Energy and Mining. CNPC has a 50% holding. The construction of the refinery commenced in May 1998 and it became operational in May 2000, with an annual processing capacity of 2.5 million tons. Its PhaseⅡ construction was completed in June 2006, increasing its crude processing capacity to 5 million tons. In 2006, a total of 4.16 million tons of crude was processed in this refinery. In 2007, a total of 4.74 million metric tons was processed at this Refinery.
Block 15
On August 30, 2005, CNPC, Petronas, Nigerian Express, Sudapet and the Hi-tech Group signed a production sharing contract with the Sudanese Government to explore and develop oil and gas in Sudan's Block 15. Located in northeastern Sudan, Block 15 covers an area of 24,377 square kilometers, most of which is located in the Red Sea.
Block 13
On June 26, 2007, CNPC signed a production sharing contract with the Sudanese Government on Block 13. Located in the northern waters and coastal area of the Red Sea, Block 13 covers an area of 38,200 square kilometers, 22,000 square kilometers of which is located in the Red Sea. A joint company has been established by CNPC, Pertamina, Sudapet, Sudan's DINDIR, Nigerian Express and AFRICAENERGY. CNPC, Pertamina and Sudapet are the operators to be engaged in oil and gas exploration.
Oilfields Services, Engineering and Construction
CNPC provides technical services in Sudan, including geophysical prospecting, well drilling, logging and formation testing, as well as engineering construction. In 2007, we had three geophysical prospecting crews, 29 drilling (workover) crews and 60 logging and testing crews operating in the country.
As a general contractor, CNPC has completed the construction of a range of major projects, including oilfield surface engineering of Block 1/24, Block 3/7 and Block 6, the 1,506-km long pipeline between Heglig and Sudan Port, the 716-km long pipeline between Block 6 and Khartoum Refinery, the viscosity- breaking unit for Block 6, the phase I construction and phase II upgrad of Khartoum Refinery and the polypropylene unit. We have designed and set up the first delayed coking unit for high-acid and high-calcium crude oil in the world in Sudan. The 1,506-km long pipeline from Heglig to Port Sudan, with an annual crude delivery capacity of 12.5 million tons, was completed within 11 months.
Local Development
While operating oil and gas businesses in Sudan, CNPC has attached great importance not only to safety and environmental protection in the country but also to local public welfare undertakings. We always regard local socioeconomic development and bringing benefits to local residents to be the most substantial element of our sustainable development in Sudan.
With the common efforts of CNPC, fellow operators and the Sudanese government and people, a self-contained modern petroleum industry integrating both upstream and downstream businesses has been established in Sudan, allowing the country to become an oil exporter. Jet fuel, diesel and chemical products that once were in short supply in Sudan are now produced in abundance and exported to neighboring countries.
By the end of 2006, CNPC had invested over US$ 30 million in Sudan to support public welfare and over 1.5 million local people have directly benefited as a result.
>> Environmental Protection
In the Heglig Oilfield of Block 1/2/4, US$ 30 million has been spent in building the world's largest oilfield waste water treatment system by using living beings and plants. The system covers an area of 5.28 square kilometers and can process 250,000 barrels of waste water every day. The oilfield waste water processed by using biological degeneration technology has all met or exceeded international discharging standards and obtained ISO14001 certification. The clean processed waste water is used to improve the local environment, promote the development of the local economy and ensure a harmonious relationship between energy exploitation and environmental protection in this region.
>> Improve Local Medical Conditions
Provide financial support to build the KRC Friendship Hospital, Fula Friendship Hospital, Heglig Hospital and Palouge Friendship Hospital.
Donate medicines to local residents and dispatch doctors to inoculate local people free of charge.
Donate medical equipments, including ambulances and surgical operation rooms, to Malual Hospital.
In 2007, CNPC signed a Nonprofit Foundation Agreement with the Ministry of Social Security of Khartoum State to provide USD 1 million to improve the living and medical facilities of orphanages, senior citizens' homes and public medical institutions.
>> Support for Local Education
Khartoum Refinery invested over US$ 300,000 in building a primary school for the children of its Sudanese employees, which has an area of 1,024 square meters.
A donation from Block 3/7 helped to build two schools for children near the oilfield.
Block 1/2/4 project supported the construction of 22 schools which have provided education to 65,000 people.
CNPC's BGP invested US$ 500,000 to found a geophysical research center in cooperation with Khartoum University.
China National Logging Corporation (CNLC) under CNPC sponsored the building of an academic conference hall in Khartoum University and donated teaching equipments worth US$ 30,000.
>> Infrastructure Construction
Donate US$ 10 million to the government of Sudan to building the Malual Bridge. The completion of this bridge will greatly promote local economic development and improve the traffic in this region.
Provide support to the local government to build an airport and highways.
>> Improve Living Conditions for Local Residents
CNPC's operation companies in Block 1/2/4, Block 3/7 and Block 6 have dug over 170 water wells for local residents to alleviate their shortage of drinking water.
The operation company in Block 6 supplies water to remote villages in the dry seasons.
Khartoum Refinery laid an additional pipeline at the water purification plant near the Nile to supply clean drinking water to local residents, who had once taken drinking water directly from the Nile.
In 2007, the company offered financial assistance to Mygoma and Al Rashad Center orphanages, Al Sagana Rest Home, Al Salamapi Workshop and Ibn Sina Hospital.
In 2007, CNPC formally initiated a USD 200,000 public welfare project with the help of the Sudanese government. As part of the project, we provided shuttle buses for residents of senior citizens' homes and students of a local college; vocational education for 500 school dropouts; work experience activities for students organized by a number of government bodies; and education service and teacher training in 100 elementary schools.
>> Creating Jobs
CNPC attaches great importance to creating employment and has hired over 4,000 Sudanese employees and more than 7,000 local day laborers. We have also paid a great deal of attention to training local employees. Since 1998, we have sent some of them to China and other countries to receive training in order to improve their skills. A number of Sudanese students have been selected to study in colleges and universities in Beijing. And a group of Sudanese professional talents specialized in oil and gas exploration and development, refining and chemicals, geophysical prospecting, well drilling and engineering construction, has been established, which is significant to the sustainable progress of Sudan's petroleum industry.
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