South Sudan to Auction off Oil Exploration Licences before Year’s End

On Tuesday, Mohamed Lino Benjamin, the director general of petroleum at the South Sudanese Petroleum and Mining Ministry, announced in an east African oil and gas conference that his country plans to hold an auction for an as-of-yet undetermined number of oil exploration blocks; just as soon as the Petroleum and Mining Ministry has finished mapping the blocks out.

“We are now working on a concession map, and this will lead us to the initiation of the licensing for the new annexed blocks, and we are hoping that by the end of this year that we will have a licensing round,” he said.

South Sudan currently operates 10 exploration blocks, but Reuters claims that it has already declared its intent to break up the huge Block B into more manageable chunks. The Block B, located in the state of Jongeli, has been controlled by Total since 1980, but due to insecurity during the civil war with Sudan the company suspended al exploration activity in 1985.

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At the conference South Sudanese officials also mentioned their interest in plans for a new pipeline to a new port being built on Kenya’s northern coast, which would allow South Sudan to export crude oil via the Indian Ocean, without having to use Sudanese pipelines, and therefore avoid any potential fallouts.

Architectural model for the new port of Lamu in Kenya.

The civil war between Sudan and South Sudan was one of the bloodiest in Africa’s history, and whilst it ended in 2005, and South Sudan were given their independence in 2011, tensions between the two neighbours are constantly on edge.

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South Sudan only restarted production in April after a row with Sudan over fees for using its pipeline infrastructure had forced a shutdown in January.  The pipeline would take oil to the port of Lamu, which is being developed as part of a $25.5 billion project to link South Sudan, and Ethiopia (both of which are landlocked) to the Indian Ocean by highway, railway, and an oil pipline.

By. Charles Kennedy of Oilprice.com