INTERVIEW - Sudan oil output falls short of estimates - minister

KHARTOUM (Reuters) - Sudan's oil production averaged 470,000 barrels per day in 2008/09 below estimates of 500,000 bpd, and plans to build a new refinery in Port Sudan have been shelved indefinitely, the oil minister said on Sunday.

Al-Zubeir Ahmed al-Hassan, also the minister of mining, said Sudan was witnessing a "gold rush" with commercial concessions being awarded to new companies and small-time mining exploding throughout Africa's largest country.

"The average (output) had been expected to reach 500,000 (bpd) but the actual is 470,000," Hassan told Reuters in an interview.

"Next year we are trying to be realistic... in the pricing and production."

He said production may reach over 500,000 bpd next year but official estimates were only 480,000 bpd.

Problems included delays by contractors and in implementing new methods to reduce large amounts of water produced with both the sweet Nile Blend and the heavier Dar Blend.

Hassan gave the first reply to anti-corruption group Global Witness who said Sudan's official crude figures were less that those published by China's CNPC (China National Petroleum Corporation), the major stakeholder in Sudan's oil sector.

The group said Sudan's semi-autonomous south, which is due 50 percent of revenues from oil fields in the south, could be owed more than $600 million in back payments.

Hassan said CNPC used figures from the wells while Sudan's figures were for net production. CNPC's figures included water and crude consumed during processing. Oil pressure at the wells was also higher than at Port Sudan, he added.

"We think that they have to defend their figures to Global Witness... because it is their side that had shown these figures," he said of CNPC, adding the company confirmed Sudan's net production figures were correct.

Under a 2005 north-south peace deal, southerners have the right to vote on secession in 2011.

But with most oil fields running along the north-south border and refineries and pipelines in the north, Hassan said there would have to be continued cooperation between the former foes even if the south separated.

"I still think that technically and financially the transport of oil from the south through Port Sudan... is more economical and more viable than any other suggestion," he said.

He said plans for a new Port Sudan refinery were on hold indefinitely because of soaring costs and that Sudan was still in talks with CNPC to double the capacity of Khartoum's 100,000 bpd refinery instead.

And he denied reports that state company Sudapet would take a majority share in all northern oil concessions, saying the firm would only be improving capacity to become an operator in some blocks.

The minister added Sudan had found good shows of oil and gas reserves in a number of northern blocks including offshore in the Red Sea, but was looking for foreign partners to share the cost of further exploration.

Hassan said a "gold rush" had gripped Sudan and that the government was trying to regulate small-time mining to limit their use of mercury and integrate the miners into the economic system.

"We are giving (larger) concessions to companies in the Red Sea province, Nile province, Northern province and Southern Kordofan," he said, adding one field alone had proven reserves of 30 tonnes.

He said commercial reserves of copper and zinc had also been found in Sudan's east.