Africa - Talisman to drill 3 new exploration wells in Sudan

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Talisman to drill 3 new exploration wells in Sudan


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News Article by REUTERS posted on November 21, 2000 at 01:56:11: EST (-5
GMT)

Talisman to drill 3 new exploration wells in Sudan

By Dann Rogers

CALGARY, Nov 20 (Reuters) - Talisman Energy Inc. , Canada's biggest global
oil producer, will soon
drill three new exploration wells in war-plagued Sudan that could double its
reserves in the African
country, the company said on Monday.

The Calgary company has been subject to intense scrutiny from activists who
say its activities in Sudan
are prolonging an 18-year civil war pitting the mainly Christian and animist
black African south against the
Arabised north.

The south's fight for secular rule and autonomy from the Islamist-led north
is complicated by tribal
conflicts and factional fighting which blur the crude north-south divide.

"We'll start drilling before the end of the year and if all three plays
work, proven reserves could increase
from 50 to 100 percent," said Nigel Hares, Talisman's vice-president of
international operations.

Analyst Martin Molyneaux of FirstEnergy Capital Corp. said adding low-cost
oil reserves from Sudan
boosts Talisman's corporate performance -- while raising the political
costs.

"Sudan is one of the few places in the world where you can bring lots of oil
onstream quickly and
inexpensively which is pipeline-connected to markets," said Molyneaux.

"However, they still suffer a Sudan discount in their share price because
U.S. government sanctions on
Sudan make some American investors think twice about jumping into Talisman."

The Clinton administration has delayed U.N. Security Council consideration
on lifting sanctions against
Sudan until after the U.S. presidential elections are concluded.

Talisman has a 25 percent interest in the 4.9 million-hectare oil project in
the Heglig region of the African
country which has proven reserves of 850 million barrels.

Its partners in the field, now producing about 200,000 barrels daily, are
China National Petroleum Corp,
Malaysia state oil company Petronas, and the Sudan government.

The consortium will drill the Zafir-1 well in block 2a and the Timor-1 and
Shalongo-1 wells in block 4 of
its concession.

All three are targeting structures about 40 to 50 million barrels in size
which have the potential to increase
to at least 250 million barrels each if adjoining pools contain as much oil
as thought, said Hares.

Four drilling rigs in Sudan are doing a mixture of development and
exploration work.

"We're just getting into the six months of dry season in Sudan when we have
access to block 4, so we're
building roads at the moment," said Hares.

Any new discoveries would be shipped along the 1,500 kilometre pipeline from
the oil fields to Port
Sudan on the Red Sea. It has a capacity of 200,000 barrels per day that
could be increased to 450,000
bpd by adding new pumping stations, the company said.

Talisman added that it will begin testing the economic viability of the
Timsah-1 well in block 4 within a
week.

"That's a well we drilled earlier this summer and it has hydrocarbon
indications in it. We expect to know
what's down there in about a month," said Hares.

Talisman shares were off 60 Canadian cents in late-day trading on the
Toronto Stock Exchange at
C$48.40. They have traded between C$58.85 and C$33.50 in the past 52 weeks.

($1=$1.56 Canadian)




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