Oil production in South Sudan to resume this month - Livemint

New Delhi: India’s energy security efforts will get a fillip as production from South Sudan oil fields are expected to start in March.

The development assumes significance as the newly formed African nation stopped and capped crude oil production from all its 900 wells in January last year. This was done in protest after Sudan started drawing some oil as “dues in kind” to claim unpaid fees by South Sudan since its independence.

The development will boost OVL’s production, with the explorer expecting to produce 6.865 million tonnes (mt) of oil and equivalent gas in the current fiscal compared with around 8.753 mt in the previous year because of strife in South Sudan and Syria.

There are two types of charges that are to be paid to the government of Sudan. One is the transit fee and the other is the transmission and processing fee. The transit fee that has been agreed between the governments of Sudan and South Sudan is for the government’s portion of the South Sudan crude agreed at $1 per barrel. This is not applicable for foreign partner’s crude. The transmission and processing fee for both government and foreign partner’s crude has been decided at $8 per barrel.

“This is a much lower tariff from what was originally demanded. Also, the forces of both the nations which were facing each off have been removed,” said Othol.

Sudan had earlier been demanding a fee of $36 per barrel for allowing South Sudan use its infrastructure, which the latter had termed as unjustified. Oil accounts for about 98% of South Sudan’s revenue, with output of around 350,000 barrels per day.

While ONGC has been seeking exemption from payment of the transit fee, the issue will have to be negotiated separately between foreign companies such as OVL and the Sudan government.

The Sudan government has been asking foreign companies $5 per barrel as transit fee. “While we, along with our partners, will negotiate on the issue of transit fee, the production will begin,” said Sarraf.

South Sudan, created in July 2011, owns 85% of undivided Sudan’s hydrocarbon resources, but the North, known only as Sudan, has the entire refining infrastructure.

In another development, South Sudan plans to issue new passports to South Sudanese nationals residing in India who have the old passports bearing Sudan as their nationality, according to Othol.

There are around 200 South Sudanese nationals in India, of which around 50 have old passports that have expired, making them illegal residents. This has led to these expired passport holders facing immigration related problems, with the latest being the one faced by students in Hyderabad.

“It was not a major issue. The students are not at fault. They were caught in the middle of the new country being created. The South Sudanese officials will come here in India to issue these people new passports of South Sudan,” Othol said.