South Sudan Oil Output Expected to Rise

South Sudan oil production
South Sudan has huge oil reserves

AFRICANGLOBE – Sudan plans a budget of between 20 and 30 billion Sudanese pounds ($7 billion) in 2013, boosted by higher oil output and gold exports, it was announced on Monday.

This announcement came at a time when Sudan’s currency sagged to a historic low against the dollar on the key black market.

Dealers said the currency could be battered further as hopes for a fast re-opening of South Sudanese oil exports faded.

According to statistics the Sudanese pound had more than halved in value since South Sudan became independent in July last year, taking with it three-quarters of the united country’s oil output.

The former civil war foes agreed in September to resume oil exports but have been unable to agree on setting up a border security zone first – a preconditon for resuming oil flows.

Sudan has been struggling with an economic crisis since South Sudan seceded last year, taking with it about three-quarters of the country’s oil output.

Increased output in Sudan’s remaining oilfields would help offset the loss next year, as would growing gold exports.

Oil production was expected to rise from 115.000 barrels per day to 150.000 bpd. Sudan had planned to boost output to 180.000 bpd this year but failed to reach the target.

Gold exports reached between 47 and 48 tonnes by November and were expected to rise above 50 tonnes annually, bringing in more than $2 billion a year.

The budget did not include any increases in wages, which was necessary to ensure the government could continue to cover its subsidies on food and basic goods.

The government scaled back its costly fuel subsidies in June as part of austerity measures to plug a budget gap, sparking a series of massive anti-government demonstrations.

Last year, amid great jubilation, South Sudan split from Sudan after decades of guerrilla struggle. But the divorce was messy.

Forces from the two countries have battled intensely over the past year amid confusion over disputed areas and contested oil fields.

South Sudan’s Predicament

South Sudan has billions of barrels of oil, but the pipeline to export it runs through the north. south Sudan shut down production last winter, which deeply wounded the economies on both sides of the border, leading to skyrocketing inflation, protests and rising discontent.

Since then, negotiations have gone around and around, with increasing pressure by the United States, the African Union and the United Nations to come to an agreement.

Since Sunday, Omar Hassan al-Bashir, international fugitive, wanted war criminal and president of Sudan, and Salva Kiir, South Sudan’s leader, had been holed up together in negotiating rooms in Addis Ababa, Ethiopia, trying to hammer out a compromise.

For years, the two men fought each other on the battlefield, and it seems that the history of bitterness has been extremely difficult to overcome.