The government of Sudan has delayed an extension to Oil and Natural Gas Corporation Limited (ONGC) Videsh’s license on Block 2B as it seeks higher royalties, tax, and profit, Ecofin Agency reported.

The license for Block 2B expired early December and an automatic 5-year extension is available. However, Sudan, whose revenues have been hit with a drop in oil prices, wants higher taxes and royalties before it agrees to the extension, informed Business Standard.

In 2003, ONGC Videsh Ltda (OVL), the overseas arm of ONGC, bought a 25% stake in Greater Nile Oil Project (GNOP) which comprises of Block 1, 2 and 4 in Sudan. The project produces about 50,000b/d. Other partners in the projects are CNPC with 40% stake, Petronas with 30% and Sudapet with 5%.

Additionally, Sudan has not paid OVL for the oil from GNOP it consumed. Post-secession, as the Sudanese government’s share of total production in Sudan was not sufficient to meet requirements of local refineries, foreign firms were asked to sell their share of crude oil to it. However, the payment of dues on account of crude oil purchased by the Sudanese government has not been received. OVL’s share of the outstanding dues is about $300m.