A Review of the Nigerian Energy Industry

Total plans South Sudan-Uganda oil pipeline

8 December 2012, Sweetcrude, DOHA, Qatar – Total, the French oil giant, is considering a plan to build a pipeline from South Sudan to Uganda, which would continue to Kenya’s coast.

The project would solve South Sudan’s headache about how to export its oil, a major cause of dispute between it and neighbour Sudan since the former declared independence mid-this year.

Total boss, Christophe de Margerie, said his company had proposed to Uganda that a pipeline that is planned to bring Ugandan oil to a Kenyan port be built so it could be extended to South Sudan.

“The pipe, which is supposed to be from our potential blocks, because they are not yet our blocks in Uganda, could be, effectively, a hub for different sources of crude,” de Margerie told a press conference at the sidelines of the World Petroleum Congress.

“We say to Uganda as part of our long-term view you have to take into consideration what sort of oil can come from neighbour countries to make the pipe less expensive,” he added.

According to Reuters report, Landlocked South Sudan took two-thirds of Sudan’s 500,000 barrels a day of oil production when it became independent in July, but it is now locked in a row with Khartoum over the use of the northern pipeline to the Red Sea.

Khartoum has demanded a $32 a barrel fee to use the pipeline to Port Sudan, which is more than 10 times typical industry levels, taking account of construction cost and distance.

South Sudan has talked to companies about building a pipeline directly to Kenya, but analysts say it would be difficult for the country, which still suffers civil strife, to raise the funds required or overcome other logistical challenges.

Connecting with the pipeline planned for Uganda to Kenya could significantly cut the total cost.

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