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South Sudan continues to spend oil revenues in advance and its oil sector continues to lack transparency, according to a UN report that was made public recently.
One of the newest countries in the world, South Sudan, broke from Sudan in 2011, taking with it around 350,000 bpd in oil production. But then civil war in South Sudan broke out in 2013 that further complicated oil production.
Currently, South Sudan pumps around 180,000 barrels of oil per day (bpd) and it aims to grow its production in the future.
According to a report by the Panel of Experts on South Sudan drafted in November 2019 but made public recently, “There has been a continued lack of transparency in the oil sector. The Ministry of Petroleum has not ended the practice of pre-sale financing arrangements for South Sudanese oil, despite the recommendations of the International Monetary Fund.”
Last year in March, the IMF warned South Sudan to immediately stop contracting expensive and nontransparent oil advances. South Sudan had taken loans from Chinese companies with the promise to repay them with proceeds from future oil revenues—from oil it has yet to get out of the ground.
The UN report found that the African oil producer continues with the practice to strike pre-sale financing arrangements with little transparency.
“The Panel was unable to verify the financial liabilities of the Government related to oil advances, cargoes and repayment terms because the Government has not released current data on oil sales or published its marketing report, in accordance with the stipulations in the Agreement on transparency and accountability,” the UN report said.
South Sudan’s Ministry of Petroleum published last month a report, saying that it is “trying to increase transparency in the country’s oil and gas sector, specifically concerning the financial aspects.”
“All this information is now available, and everyone will have access to it,” the ministry said at the end of February.
By Tsvetana Paraskova For Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.