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The government of South Sudan is determined to ramp up crude oil production by November, so it can start exporting fuels to neighboring Ethiopia, Petroleum Minister Ezekiel Lol Gatkuoth said in Kenya. The minister was part of a delegation also including first Vice-President Taban Deng Ga Deng that met with Kenyan President Uhuru Kenyatta to discuss the situation in the east African country.
Gatkuoth said that before the war, South Sudan pumped half a million barrels of crude daily but now this is down to just 130,000 bpd because of the prolonged conflict. External source peg the pre-war daily production at 350,000 barrels bpd.
When South Sudan became independent in 2011, it gained not only sovereignty, but control of about three-fourths of Sudan’s oil production, a devastating blow to Sudan’s economy. The IMF estimates that Sudan lost roughly 55 percent of its fiscal revenues and about two-thirds of its foreign exchange earnings. Sudan’s crude oil export revenues were dramatically slashed from a near US$11 billion in 2010 to less than US$2 billion in 2012.
Earlier this year, the transitional government of South Sudan, formed by President Salva Kiir and former rebel leader Riek Machar in April, announced it was planning to restart full-scale oil production in July. However, fights broke out within the government, which led to 270 casualties and Machar fleeing the country.
Following his ousting, six ministers from the government were removed and replaced with loyal officials, including Gatkuoth, who was nominated personally by Deng. During his visit in Kenya, Deng accused Machar of stalling the peace process, but assured media that now that he’s gone, the road to peace has been cleared.
Although South Sudan has 75 percent of the former larger country’s oil, it has no sea outlet, so it has to rely on Sudan for the transportation of its crude.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.