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Sudan, South Sudan To Jointly Repair Oil Infrastructure

Oil infrastructure

Sudan and South Sudan have agreed to jointly repair oil infrastructure that was damaged during the bloody civil war that resulted in the split in 2011, Reuters reports, citing the information minister of South Sudan.

The infrastructure should be repaired within the next three months in order to allow the ramp-up of oil production in the youngest nation in Africa, which also took most of the old country’s oil wealth.

South Sudan is almost completely dependent on oil revenues, not least because of the decades-old civil war going on in the united Sudan that ruined the country’s agriculture. What’s more, the new state is fighting its own civil war between government forces and an army loyal to former deputy president Riek Machar.

The two countries have also agreed to set up a joint guard of the South Sudan oil fields to prevent militant attacks on the critical industry.

Like South Sudan, Sudan has been eager to build an oil industry after the split with South Sudan in 2011. After the secession, the two countries have remained mutually dependent on oil revenues, with South Sudan owning 75 percent of the oil reserves, while the north owns the only current transport route to get oil to international markets.

Related: Was This Just A Temporary Pullback In Oil?

The petroleum ministers of the two countries announced this week another step made in the direction of better bilateral relations. They said Sudan and South Sudan have agreed to try and resume operations at two South Sudanese oil production consortia, whose work was suspended amid the fresh conflict in South Sudan. This had left the new country with only one oil-producing company.

Sudan is not losing hope of developing its own oil reserves. A potentially major discovery was made back in 2011 in the Al Rawat Block 25, which is currently fully owned by Sudan’s state oil company Sudapet. Sudan eyes initial production of 10,000 bpd from the field, with the reserves in the field recently upgraded to 165 million barrels from 19 million barrels.

South Sudan, for its part, has oil reserves estimated by BP at 3.5 billion barrels as of 2016. Production as of March 2018, however, stood at just 135,000 bpd.

By Irina Slav for Oilprice.com

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