South Sudan to resume oil production, export

Juba, Jan 8 (IANS) South Sudan said that it would resume the production and export of crude oil to the international market through Port Sudan starting Wednesday.

Minister for Petroleum Puot Kang Chol on Tuesday said the government has been collaborating with Sudan's Ministry of Petroleum and Energy, Dar Petroleum Operating Company (DPOC), a consortium of oil exploration and production companies, Bashayer Pipeline Company, the company in charge of the pipeline, and China National Petroleum Corporation, among other international partners, to guarantee the resuming of the oil production, reports Xinhua news agency.

"The Ministry of Petroleum and partners are hereby directing DPOC to kick-off resumption of crude production and operation as early as January 8," the minister told journalists in Juba, the capital of South Sudan.

He noted that the Dar Blend's production would start in Blocks 3 and 7, with a target of 90,000 barrels daily in the first six months and then would rise.

Chol said that partners raised several concerns about technical readiness to resume production, including force majeure and security assurance, which he said had been addressed.

The flow of South Sudan's crude oil through the Sudanese pipeline was disrupted after the infrastructure was damaged in early 2024 due to the ongoing clashes between the Sudan Armed Forces and the Rapid Support Forces, which erupted in mid-April 2023.

Currently, South Sudan depends on Sudan's oil infrastructure to transport crude through Port Sudan for export to international markets.

Last month, South Sudan announced a plan to construct a new oil refinery worth $3 billion at the Tharjiath field in Unity State, one of the country's key oil-producing areas.

While an existing refinery operates in Tharjiath, its capacity is limited, and inadequate road connectivity hampers the transportation of refined products to the market, said Minister of Information, Communication Technology and Postal Services Michael Makuei Lueth.

The new refinery aims to meet the fuel consumption needs of South Sudan, and its construction will be financed through a public-private partnership, Makuei told reporters in Juba following a Council of Ministers meeting.

Nilepet, or Nile Petroleum Corporation, South Sudan's national oil and gas company, will hold a 30 per cent stake in the new refinery, Makuei said.

Quad Layer Holdings, which will hold a 70 per cent stake, will be responsible for constructing roads to connect the refinery to markets, ensuring efficient fuel distribution, he said. The two contracted companies will finance the entire project, and the government will reimburse their investment after the refinery begins production.

The official noted that after approval of the project by the government, it will be followed by feasibility studies to determine the capacity of the refinery before the contract is signed.

Oil production accounts for about 95 per cent of South Sudan's annual fiscal expenditure. Currently, Juba depends on Sudan's oil infrastructure to transport crude through Port Sudan for export to international markets.