Sudan offers to help south resume output

Petroleum Minister of South Sudan; Stephen Dhieu Dau. Photo by Stephan Utenriksdept27 May 2014, News Wires – Sudan has offered to supply materials, engineers and electricity to South Sudan to speed up the repair of oilfields damaged during a five month rebellion that has cut output by a third.

Petroleum Minister Stephen Dhieu Dau told Reuters South Sudan’s output stood at 165,000 barrels per day, down from 245,000 bpd when the fighting broke out in December, but that production should increase within 45 days to three months.

At least 10,000 people have died since violence erupted in the capital Juba and spread across oil producing regions. South Sudan is desperate to increase production after the conflict depleted government coffers and crippled the economy.

Dau said his counterpart in the Khartoum oil ministry has agreed to provide support to Sudd Petroleum Operating Company and Greater Pioneer Operating Company (GPOC), operators of the two oilfields in the northern Unity State bordering Sudan.

“The two operators are coordinating and having meetings in Juba and Khartoum to assess technical support that will be required,” Dau told Reuters by telephone from Juba on Sunday.

Juba and old foe Sudan, from whom South Sudan ceded in 2011, came close to a full blown war soon after independence due to a dispute over oil fees. Though both sides backed down, a 14-month oil shutdown at the time devastated both economies.

Dau added Khartoum had agreed to supply electricity from its Heglig oil facility on the border of the two countries if the Unity state oilfields were without power, though the extent of the damage to the oilfields was not clear.

About 40,000 bpd was pumped at the Northern oilfields (Blocks 1,2 & 4) before clashes broke out while the Tharjiath oilfield produced 5000 bpd. No oil has been produced at either site since December.

GPOC, the operator of the Northern oilfields, is owned by China’s National Petroleum Corporation, Malaysia’s Petronas and India’s ONGC Videsh.

Dau told Reuters both Northern and Tharjiath oilfields were under government control and production was expected to resume “within 90 days” but this is not certain yet as the security situation and the extent of damage has to be evaluated by oil companies.

“Before the recent attack on Unity state capital Bentiu, we were projecting that resumption should be in July but now after the recent attack we are not sure, we have to revise the action plan that was put in place by the operators,” Dau said.

Dau said all the South Sudanese oil is pumped from Paloch – the site of an oil complex and crude oil processing facility in the north of the country near the border with Sudan, which hosts the sole pipeline export route.

Paloch’s output fell from 200,000 bpd in December to 165,000 as replacement parts could not reach the oil facility, Dau said, with oil companies unable to use the White Nile River to transport spare parts on large barges due to insecurity.

“We are working to solve these challenges by getting materials from Sudan,” Dau said. “We expect that within 45 days to two months, we should be able to go up to 200,000 bpd.”

President Salva Kiir and rebel leader Riek Machar, Kiir’s former deputy, signed a ceasefire agreement on 9 May. Though both sides swiftly accused each other of violations, there has been no large scale fighting since then.

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