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South Sudan Tightens Oil Industry Security

Guns

South Sudan’s government is making a push for better oil industry security as the new African country looks to return to oil production rates from before the civil war that led to the separation of Sudan into two states.

Malaysian Star quotes South Sudan’s Minister of Petroleum, Ezekiel Lol Gatkuoth, as saying that "Security is now under control, and those investing will be provided with security."

Currently, the only oil-producing region in South Sudan, which boasts the third-largest reserves of the commodity in Africa, is the Melut Basin, which yields 130,000 bpd of crude. The rest of the country’s oil-producing assets were shut down during the war.

Earlier this year, South Sudan deployed a security force including police, army personnel and security officers to the Melut Basin to guarantee the safety of operations. The Melut Basin is developed by the CNPC and Petronas.

South Sudan now hopes to raise oil production to 150,000 bpd by the end of this year and boost it further to 200,000 bpd in 2018. Before the war, Sudan pumped 245,000 bpd. Early this year, the country’s Finance Minister said there were plans to boost production to 290,000 bpd in the fiscal year to end-June 2018.

Related: Aggressive OPEC Pushes Oil Prices Up

South Sudan, which holds almost all of the former bigger country’s oil reserves, seceded from Sudan in 2011. This was followed by a bloody conflict that broke out two years later and ultimately led to the final separation of the two. The South Sudan government relies on oil revenues for almost all of its needs, which makes production growth vital for the state.

South Sudan is the only legacy oil producer in East Africa, with reserves estimated at 1.5 billion barrels. Besides Petronas and CNPC, India’s state giant ONGC also had operations in the country but earlier this year the South Sudanese government refused to extend the company’s license for another 15 years, positing, ONGC said at the time, investment demands that were uneconomical to meet.

By Irina Slav for Oilprice.com

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