South Sudan to borrow about $1 bln from oil firms in 2014/15 -budget

(Adds details from budget, background)

By Carl Odera

JUBA, July 2 (Reuters) - South Sudan plans to borrow 3billion South Sudanese pounds, about $1 billion at the officialrate, from oil companies during the coming financial year tohelp cover repayments on domestic loans and previous oiladvances, the government said in a budget document.

South Sudan has turned to oil companies before to plug a gapcaused by a drop in oil output, the main source of cash for anation mired in conflict since mid-December. Fighting betweenrebels and the government has damaged some fields.

The budget anticpates revenues of 11.553 billion pounds forthe 2014/2015 fiscal year, which is starting in July. Aboutthree-quarters of that is due to come from oil earnings,according to the text of the finance minister's speech datedJune 25.

A lawmaker told Reuters it was presented to parliament onWednesday.

From those revenues, the government said, 3.711 billionpounds would be paid to cover domestic loans and oil advances.

"In order to offset the negative impact these repaymentswill have on our budget financing next financial year, we intendto borrow a further 3 billion pounds from the oil companies,"Finance Minister Aggrey Tisa Sabuni said in the speech.

He said this borrowing was "in effect rolling our obligationover until such a time as our budget is on a more sustainablefinancial footing."

The amount is equivalent to about $1 billion at the officialrate of 2.9623 South Sudanese pounds to the dollar. Mostbusinesses have to operate at an unofficial rate of a littlemore than 4 pounds to the greenback.

The minister did not name the oil companies which would beapproached. The main investors in South Sudan include ChinaNational Petroleum Corp (CNPC), India's ONGC Videsh and Malaysia's Petronas.

The budget document detailed previous borrowing fromcompanies, saying that as of June 25 it still owed CNPC $256million and trading firm Trafigura $78 million.

The document said projected revenue was based on oiloutput's rising to 260,000 barrels per day by the end of theyear from 180,000 bpd at the start of the year, an apparentreference to the fiscal year although it did not specify.

An oil ministry official last month put production in lateJune at about 160,000 bpd.

($1=2.9623 South Sudanese pounds at the official rate) (Reporting by Carl Odera; Writing by Edmund Blair and DrazenJorgic; Editing by Robin Pomeroy)

• Politics & Government
• Budget, Tax & Economy
• South Sudan