However, the small Calgary firm couldn't raise enough money and was eventually taken over. Today, Talisman owns 25 per cent of the venture, with state-owned oil companies from China, Malaysia and Sudan controlling the rest. Earlier this month, Buckee told a New York energy conference that the development contains commercial reserves of an estimated 800 million barrels of oil, compared to 450 million barrels when Talisman first got involved. The project's biggest technical obstacle has always been the need for a way to move the oil to export markets. Work on a 1,500-kilometre pipeline to the Red Sea, along with a marine terminal, is almost complete.
Geopolitical risk is the other obstacle.
U.S. warplanes attacked a pharmaceutical factory in the capital city of Khartoum mere days after Talisman announced the Arakis deal last August. American officials claimed the plant made a component used in nerve gas. Having moved into the Sudan, the one thing Talisman misjudged was the political sensitivity of the Sudan. Much of that negative attitude is going to fall by the wayside once the oil starts flowing. Crude oil production from the Muglad Basin is expected to begin late in the third quarter of 1998 or early in the fourth quarter, hitting 150,000 barrels per day next year, with 37,500 barrels flowing to Talisman.