How South Sudan can overcome hiccups, rise as EAC oil giant

The ongoing oil and gas conference in Juba, South Sudan is sending the right signals to international investors and the East African Community.

Going by the declarations made early this week by senior government officials led by Vice President James Wani Igga and the Minister for Petroleum Ezekiel Lol Gatkuoth, all indicators are that the government is going all out to ensure the world’s youngest nation will soon be pumping at least 500,000 barrels a day. It sounds ambitious, but it’s doable.

ALSO READ: Don’t turn a blind eye to injustice as police tear-gas little ones^[1]

If this target is met, it will come after close to five years of a bloody conflict that cut down oil production from 350,000 barrels per day to a pitiful 130,000 barrels currently.

The increased output would provide desperately needed revenues for a government which since independence has relied on oil to cater for all its expenses.

However, it is easier said than done to achieve the set targets without some hard work getting done as a matter of priority. For starters, South Sudan’s regional oil and gas infrastructure is limited to its pipeline link to Sudan.

To increase production, experts say the country will need to integrate its energy infrastructure with that of Kenya, Ethiopia and Uganda.

How can South Sudan and its neighbours cooperate to plan, finance and build infrastructure? What can South Sudan do to better exploit its position in a regional market of 150 million people in Eastern Africa? These are the questions that delegates of the first ever Africa Oil and Power conference ongoing in Juba are trying to figure out.

As they put this into perspective, it’s important to note that in 2013, South Sudan’s oil production plunged as the war shut down facilities across its northern oilfields.

Today, of South Sudan’s three operating consortia only one, Dar Petroleum Operating Company, is producing significant volumes of oil.

As the Sudd and Greater Pioneer operating companies prepare to restart production after nearly four years, it will be the headache of the government and oil industry experts to chart the way forward on the crucial role that security has played in shaping the business environment in South Sudan.

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As for regional and international companies, they will be keenly examining how they operate in challenging cities and field locations. On the part of the South Sudan government, the question that continues to linger is what security measures have been put in place?

The other key concern is how energy and infrastructure projects gain funding in South Sudan and what risks are there and how they can be better managed. On this, Old Mutual through its subsidiary UAP Insurance South Sudan can come in handy with expertise and market knowledge that can give investors some sort of comfort before they commit on any venture.

From a financing perspective, the conference is expected to come up with mechanisms that can be employed to finance local companies’ growth as well as civil engineering and large scale oil and gas developments.

If these questions and challenges are addressed conclusively, South Sudan may rise again like the phoenix and offer a glimmer of hope to her citizens and the East Africa Community.

- The writer is a communications consultant in Nairobi

References

1. ^{^} Don’t turn a blind eye to injustice as police tear-gas little ones (www.standardmedia.co.ke)
2. ^{^} Removal of oil price controls exposes Kenyans to cartels (www.standardmedia.co.ke)