South Sudan to resume oil export, Friday

Oil tanker06 May 2013, News Wires – South Sudan will ship its first oil from its largest fields in Upper Nile state to export facilities in Sudan this Friday, May 10, according Sudan’s Oil Ministry.

This will be coming 16 months after the landlocked South Sudan shut down its production of up to 350,000 barrels per day in January last year over failure to agree with Sudan on oil fees.

In March, the two African neighbouring countries agreed to resume cross-border oil flows.

South Sudan seceded from Sudan in July 2011, becoming the world’s youngest nation. It needs to export its oil through Sudan.

Sudan’s Oil Ministry, said first oil from the Palouge field in South Sudan’s Upper Nile state will be sent to Sudan on 10 May, oil ministry undersecretary Awad Abdel-Fattah told state news agency SUNA after a phone call with the head of oil consortium Dar Petroleum, which runs the fields.

The country’s biggest oilfield, Palouge is expected to reach production of up to 180,000 bpd within a month of starting at 125,000 bpd, Dar Petroleum stated on Sunday.

“Within a month, we should be reaching 165,000 to 180,000 and we would expect to reach the level where we were before the shutdown by early next year,” Reuters quoted Dar Petroleum President Joseph Podtung as saying during the ceremony to resume output at Palouge.

In the coming days, South Sudan plans to reopen its fields in Upper Nile state, which produce Dar Blend – a heavy, sour crude.

Last month, South Sudan resumed oil production at the Jath Thar oilfield in Unity State but damage caused by cross-border skirmishes a year ago meant the output was only gradually rising. The Unity State fields produce Nile Blend – a light, sweet, waxy crude.

According to Reuters, industry experts said Dar Blend production would start at around 50,000 bpd, and quickly rise to at least 150,000 bpd, while Nile Blend was likely to remain in the range of 30,000 to 40,000 bpd for at least six months.

The first oil cargo was expected to reach Port Sudan by 20 May, coinciding with South Sudan President Salva Kiir’s plans to visit Sudan, Oil Minister Stephen Dhieu Dau said.

According to Reuters, Finance Minister Kosti Manibe said it would take until June until South Sudan would be paid for the oil exports.

Both countries, which came close to returning to war a year ago, depend heavily on crude exports for state revenues and use the foreign currency to import food and fuel.

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