Sudan admits it owes $100 mn to ONGC Videsh

Sudan admits it owes $100 mn to ONGC Videsh

Sudan has conceded in the arbitration tribunal that it owes ONGC Videsh $100 million for a pipeline built by the Indian company, setting the stage for a favourable award in the $530-million dispute that also includes claims over non-payment for oil lifted by the African government, according to people familiar with matter.

ONGC Videsh, the overseas arm of the state-run explorer, has been engaged in an arbitration with Sudan for over three years to recover its oil and pipeline construction dues. ONGC and its Chinese and Malaysian partners have already exited the oil blocks 2A and 4 in Sudan at the centre of the dispute.

The Sudan government had been lifting oil, more than its share from these blocks, and not paying for it since 2011, prompting the arbitration and exit from the blocks. Sudan is estimated to owe ONGC $530 million in total, including pipeline cost. About $30 million of interest has also accumulated on the $100 million incurred in constructing the pipeline.


The arbitration tribunal at the International Court of Justice in Hague is hearing the matter and it is unclear when it will pronounce the final award. The matter linked to oil dues is still being contested.

Once it receives a favourable award, ONGC will likely approach courts in different countries to implement it, as per people cited above. It can seek to seize the Sudan government’s assets overseas to recover the dues, in a way similar to Cairn Energy‘s legal strategy against India in the retrospective tax case.

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