South Sudan refineries on hold due to conflict: oil ministry source

By Carl Odera

JUBA (Reuters) - Two new oil refineries in South Sudan, which would make Africa's newest nation less reliant on imported oil products, have been put on hold due to the conflict in the country, an oil ministry official said.

Construction of a small oil refinery with initial capacity to process 10,000 barrels a day of crude has stopped while a smaller refinery that is ready for launch is also on hold, the official said.

South Sudan, an oil producer which became an independent nation in 2011, has no working refineries and has to import petrol and other products from Sudan or east African nations. The two small refineries were due to help change that.

But a conflict between troops loyal to President Salva Kiir and his sacked deputy and political rival, Riek Machar, that erupted in mid-December forced a reduction in oil output, which was running at about 160,000 bpd last month, down from 245,000 barrels per day (bpd) before fighting began.

An official at the Petroleum and Mining Ministry, who asked not to be named as he was not authorised to speak to the media, said "security issues" stopped U.S firm Ventech Engineers International from working on the 10,000 bpd refinery.

"But they will definitely come back," he said on Thursday, adding that the refinery could be expanded to 20,000 bpd in future and could then target exporting to Ethiopia.

The refinery is being built in Thiangrial, in the oil-producing Upper Nile state near the Sudan border. The refinery was designed to process Dar Blend, a sour crude blend from South Sudan's blocks 3 and 7 in Upper Nile.

A second oil refinery, with capacity to process 5,000 bpd of crude, was "almost complete", the official said.

"It's ready but now people are still in conflict, you cannot say anything absolutely," he added.

The second refinery is located near Bentiu, the capital of the other main oil-producing area of Unity state where production has been halted for several months due to clashes.

A state government official on Wednesday told the national broadcaster the Unity State refinery was ready and would be operational in two weeks.

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• South Sudan
• oil refineries