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South Sudan announces plans to restart oilfields shut in by violence in 2013

South Sudan has announced plans to restart oilfields in the former Unity state that were shut in by violence in December 2013.

“We are starting work today [Thursday] and shall complete it in five months,” oil minister Dak Duop Bichiok told journalists after meeting with vice president James Wani Igga in Juba.

The shut in of Unity’s oilfields has reduced South Sudan’s crude oil production to 165,000 b/d from 245,000 b/d before the conflict.

Prior to the outbreak of violence, Unity state, which has now been split into three administrative units, produced 45,000 b/d of Nile blend crude. The light, sweet and waxy crude blend is popular with Asian traders.

In their meeting, Igga and Bichiok discussed preparations for repairs to oil facilities in Unity and plans to resume work on a refinery.

Russian company Safinat won a contract to build a $1.8 billion, 50,000 b/d refinery at Akon in a joint venture with state-run Nile Petroleum Corporation, for which the foundation stone was laid in 2010. It was to be geared to produce mostly diesel.

Safinat also completed construction of a $100 million refinery in Bentiu in Unity state to produce 3,000 b/d of diesel and gasoline for local consumption, but the 2013-2015 conflict prevented it from starting up.

Bichiok said 87 South Sudanese oil technicians had now graduated in Malaysia and would be deployed as soon as possible to the refinery in Bentiu.

He called on oil companies operating in the country to resume production immediately.

Pressure is mounting on Bichiok to deliver amid economic hardship in the country. South Sudan depends on oil for nearly 97% of its budget, and public servants have not been paid for two months.

China, the largest investor in South Sudan’s oil industry, is also desperate for a full resumption of oil production.

During a visit to Juba last week, Liu Yingcai of the China National Petroleum Corporation discussed with Bichiok the resumption of production and security at the oilfields.

“Oil production will resume soon and the security in the oil fields will be improved,” the undersecretary of South Sudan’s Ministry of Petroleum, Mohammed Lino, told journalists in Juba last weekend.

China, India, India and Malaysia dominate South Sudan’s oil industry.
Source: Platts

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