South Sudan's oil minister reported on Thursday that the country has made its first oil discovery since declaring its independence eight years ago, according to Reuters.
The latest oil find, at 5.3 million barrels of recoverable oil, is small but noteworthy for the country that has seen its oil production fall from as much as 0.35 million barrels per day to the current level of 0.18 million barrels per day as the war with neighboring Sudan damaged critical infrastructure. South Sudan has plans to resume its pre-war levels by the end of next year.
For South Sudan this is critical. While it only produces 180,000 barrels per day, almost all of the country's revenues come from its oil industry. According to the World Bank, South Sudan is the most heavily oil-dependent nation in the world.
South Sudan has been on a borrowing spree this year as it struggles to get its oil industry back on track. The loans, many of which were from China, were supposed to be paid back through future oil revenues -from oil that had not yet been gotten out of the ground.
China is heavily embedded in South Sudan's oil industry, and China's JVs in the country are responsible for the majority of what it produces today.
South Sudan has plans to construct an inland crude pipeline that will tie into the main export pipeline that leads to Port Sudan at the Red Sea. The pipeline is expected to be completed in the fourth quarter of next year, S&P Platts said on Tuesday, quoting South Sudan oil minister Awow Daniel Chuang.
South Sudan is thought to hold 3.5 billion barrels of oil, much of which has yet to be explored.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More