South Sudan officials said they expected to resume oil production and exports by the end of the year after signing a raft of agreements with their northern counterparts. Oil revenues are critical to the war-battered economies of both countries.
South Sudan stopped oil production on January 22 this year following a dispute over the oil transit fee demanded by Sudan, and accused Khartoum of confiscating $815 million worth of oil from the Port Sudan pipeline. The countries came to the brink of war in April after the South briefly occupied the Heglig oilfield claimed by Sudan. Prior to the conflict, South Sudan produced about 350,000 barrels per day.
South Sudan’s chief negotiator, Pagan Amum, said his Oil Ministry had directed oil companies to begin preparations for exports in early August after reaching an interim deal with Sudan; but Sudan insisted that the oil would flow only after a broader agreement on borders and security, prompting concerns that exports would be delayed well into next year as oil companies would take months to resume production.
“From the time we reached an agreement in August…the Ministry had indicated to them [the oil companies] to start preparation,” Mr. Amum said, “I believe, before the end of the year, oil will flow.”
India’s ONGC Videsh [OVL], a subsidiary of the Oil and National Gas Corporation (ONGC) has a significant share in South Sudan’s oil fields along with the China National Petroleum Corporation.