South Sudan’s Oil Minister, Bot Kang Chol, announced that the country will resume crude oil production in Blocks 3 and 7 starting Wednesday, with an initial production estimated at about 90,000 barrels per day.
The economy of South Sudan has been suffering from severe pressure in recent years as a result of sectarian violence and the decline in crude oil revenues, which is the country’s main source of income, due to the disruption of export activity as a result of the war in Sudan.
Chol indicated during a press conference – yesterday, Tuesday – that Sudan had lifted the state of force majeure that lasted for nearly a year, allowing the transport of crude oil from South Sudan to the port overlooking the Red Sea, after the security conditions improved.
The minister said: “You all know that it will be a gradual process. We will not reach the target number on the first day, but we are seeking to reach a production of 90,000 barrels per day.”
He explained that this level is the limit that the pipeline can accommodate in the first phase, stressing: “If we have the ability to increase production, we will do so,” he said.
The minister also revealed that the government had reached an agreement with the Malaysian company Petronas to pay the value of its shares so that it could find a new partner to replace the company, which announced last August its plan to exit South Sudan after about three decades of operations in the country.
Petronas had begun legal proceedings against South Sudan, accusing it of obstructing the sale of its local assets, valued at $1.25 billion, in addition to seizing its business.
Scholl stressed that the agreement with Petronas will not affect other partners, including the China National Petroleum Corporation, Sinopec and Tri-Ocean Energy.
It is worth noting that South Sudan was producing about 150,000 barrels per day of crude oil through Sudan for export, before the outbreak of the recent war, under an agreement drawn up after the country’s independence from Khartoum in 2011.
