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ONGC files arbitration claim against Sudan over unpaid oil dues

Reuters  |  NEW DELHI 

By and Promit Mukherjee

NEW DELHI (Reuters) - The foreign acquisition unit of and Natural Gas Corp's (ONGC) has filed an arbitration claim against the government of in a London court, a said, seeking to recover dues pending for years from a project hit by the breakaway of in 2011.

People familiar with the matter in and said ONGC had filed a claim for $98.94 million, in what they said was a first for the South Asian nation's top and gas explorer against any government. They declined to be identified because they weren't authorised to discuss the matter with media.

At the centre of the dispute is ONGC's 25 percent stake the company acquired in the Greater Nile Project (GNOP) in in 2003. Other stakeholders include China's National Petroleum Corp with a 40 per cent stake and Malaysia's with a 30 per cent share.

"Yes, we have filed an arbitration as our dues have been pending for years," said N. K. Verma, of (OVL). "Notwithstanding this arbitration we will continue to work with going forward," he said, declining to provide details on the timing and location of any hearings, or the amount being sought.

The current arbitration is only for a part of pending dues that add up to about $425 million, sources said, adding ONGC has sued the government as the contracts were backed by sovereign guarantees.

ONGC will also file arbitrations for the remaining outstanding amount in due course, said a company official, who declined to be identified.

Officials in said contacts and negotiations with ONGC were being lined up.

"We have addressed the company (ONGC) to show our commitment to serious negotiation and we (have) set up a committee to determine the time frame to pay back the sum in installments," said Bekheet Ahmed Abdullah, for

SANCTIONS IMPACT

OVL's stake in the Greater Nile Project (GNOP) comprised Blocks 1, 2 and 4, and the firm also agreed to build a 1,500-kilometre pipeline to on the But in 2011 broke away from Sudan, after decades of civil war, and took control of blocks 1A, 1B and a part of block 4.

Meanwhile, because of years of trade sanctions imposed on by the U.S. - only lifted in 2017 - found it difficult to secure for its refineries, and asked foreign companies including OVL to sell their share of from the blocks to the African nation.

In 2016, OVL signed a separate agreement with for the sale of its share of GNOP has not yet paid $90.81 million to ONGC for purchases of in 2016 and 2017, according to people familiar with the matter.

ONGC Videsh had expected to clear the dues after lifting of the U.S. sanctions last year.

"We are committed to pay the money but due to the sanctions imposed on Sudan, we are facing problems in making payment," said Sirajuddin Hamid Yousuf, Sudan's to

"The sanctions were eased on Oct. 12, 2017 but we still cannot have with and others," he said.

(Reporting by and Promit Mukherjee; Additional reporting by in KHARTOUM; Editing by Kenneth Maxwell)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 11:58 IST
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