Juba now extends oil extraction contracts

Wednesday February 1 2017

By KENNEDY SENELWA

South Sudan has extended the crude oil exploration and production licences given to Asian multinationals by five years to increase output.

The Petroleum Ministry has extended the licences of Malaysia’s Petroliam Nasional Berhad (Petronas), China National Petroleum Corporation (CNPC) and India’s Oil and Natural Gas Corporation (ONGC) to 2022 to increase crude oil production to over 300,000 barrels per day.

Juba has also extended the agreement with Sudan for transporting oil in two pipelines to Port Sudan.

“We will move quickly to repair all the damaged facilities and put them back in production. With this package now signed, we will now be moving forward with oil production, especially in places that were shut down,” said Petroleum and Mining Minister Ezekiel Lol Gatkuoth.

Juba has agreed to compensate subsidiaries of CNPC and ONGC for shutting down production in 2012 following a dispute over transit fees with Khartoum. The firms will also be compensated for disruption of output due to the civil war. However, the exact amounts have not been disclosed.

Juba depends on oil revenues to finance 98 per cent of its budget, but output has declined to about 130,000 barrel per day from about 350,000 barrels per day in 2012 as a result of the civil war.

“We will do our best to increase production and also support resumption of oil from the Unity fields. We will work with Ministry of Petroleum to do our best in terms of economic development,” said CNPC’s president Jia Yong.

He said the co-operation between South Sudan and Sudan has to be strengthened to enable the two countries to benefit from crude oil production in the Unity State oil fields. South Sudan has been relying on oil production in Paloch oil field in Upper Nile State after fields in Unity State were shut down in 2014 due to the war.