South Sudan: Resumption of Oil Production Could Take a Year

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South Sudan's oil infrastructure

South Sudan shuttered its oil production in january

South Sudan hopes to resume oil production through neighbouring Sudan after taking its unilateral decision to shut down oil production in January, accusing Khartoum of stealing its crude oil, the country’s oil minister said on Thursday.

Minister of Petroleum and Mining Stephen Dhieu Dau made the remark at a news conference held in the country’s capital, Juba, during which he said the resumption of oil production at blocks 3 and 7 of Upper Nile’s oilfields will require “about four to six months” and “up to one year for production to resume for blocks in Unity State.”

When South Sudan seceded in 2011, it took with it the majority of what was Sudan’s oil fields. Distribution of oil wealth became an issue with Khartoum demanding exorbitant fees to use its infrastructure which Juba rejected. In lieu of the payment Khartoum confiscated $815 million of South Sudan’s oil, leading Juba to halt oil production.

Dau said the delay was due to damage to fighting between Juba and Khartoum’s forces in April.

He accused Sudan of deliberately bombing oil producing areas earlier this year in order to cause damage to the facilities. “Some of the facilities which were affected by the aerial bombardments by the government of Sudan need to be repaired first. This needs time,” he added.

Oil analysts have also pointed out that the haste with which the production was stopped and the density of southern crude will also delay making the oil fields operational again.

Dau expects the nations to sign a final agreement to pave the way for resumption of oil production and exports through pipelines which run through Sudanese territory, after the resumption of negotiations between the two sides by 22 September.

An agreement was signed by both sides in August. A senior Sudanese official said at the time that Juba will export its oil for US$25 per barrel. The South Sudan government said they will pay US$9.48 for every barrel in addition to a US$3 billion lump sum.

“Resumption of oil production and export through Sudan is contingent on the signing of the final agreement. We expect that talks be concluded by the September 22 as required by African Union Roadmap and the United Nation Security Council resolution number 2046,” he explained.

He said the delegation representing his country at the talks is prepared to resume negotiations at any time, should the mediating team extend an invitation to the two sides to return to the venue.

Negotiations were due to recommence in Addis Ababa at the end of August but have been put back until after the funeral of Ethiopia’s late leader Meles Zenawi on September 2 after he died on 20 August.