South Sudan oil

South Sudan is looking to pump more than 350,000 bpd of oil by the middle of next year, compared to current production of 140,000 bpd, South Sudan’s Oil Minister Ezekiel Lul Gatkuoth told Reuters[1] on the sidelines of a conference in India.

South Sudan broke from Sudan in 2011 and took with it around 350,000 bpd[2] in oil production. After South Sudan’s secession from Sudan, the two countries have been mutually dependent on oil revenues, because the south has 75 percent of the oil reserves, while the north has the only current transport route for the oil to international markets.

But then civil war in South Sudan broke out in 2013 that further complicated oil production. The oil price crash the following year additionally affected oil income and oil production in South Sudan.

South Sudan’s government and rebels signed a power-sharing agreement in August 2018, hoping to put an end to the civil war. Oil production at some oil fields that were shut in at the start of the conflict has resumed. At the end of August 2018, South Sudan resumed production[3] from the Toma South oilfield at a rate of 20,000 bpd, adding to South Sudan’s total daily average of 130,000 bpd.

By the end of this year, South Sudan expects its oil production to nearly double from the current 140,000 bpd to 270,000 bpd, minister Ezekiel Lul Gatkuoth told Reuters. By the middle of 2020, the country aims to restore production to the pre-civil war levels, he noted.

Related: An Overlooked Opportunity In Natural Gas[4]

“We used to produce 350,000 to 400,000 bpd. We expect to go back to those levels by the middle of next year,” Gatkuoth told Reuters.

South Sudan has signed a preliminary agreement with Russian oil firm Zarubezhneft to explore some blocks, while South Africa has committed to invest US$1 billion and to collaborate with South Sudan on pipeline construction and a refinery to be built next to the border with Ethiopia, the minister said.

South Sudan hopes to significantly boost its production in the near term, but according to energy consultancy Wood Mackenzie[5], the extent of damage to infrastructure is unknown, as is the performance of wells that have been shut-in since 2013. The biggest challenge to South Sudan’s rising oil production, however, would be whether the peace deal would hold long enough to allow for a sustained increase in oil production, WoodMac said in September 2018.

By Tsvetana Paraskova for Oilprice.com

References

  1. ^ Reuters (af.reuters.com)
  2. ^ 350,000 bpd (oilprice.com)
  3. ^ resumed production (oilprice.com)
  4. ^ Related: An Overlooked Opportunity In Natural Gas (oilprice.com)
  5. ^ Wood Mackenzie (www.woodmac.com)

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