South Sudan took another significant step towards unshackling itself from the Republic of Sudan following Friday’s announcement that the country has signed an “outline agreement” worth R13.8bn with South Africa to restore its limping oil industry.
Riddled by feudalism and fighting since declaring its cessation from its northern neighbour in 2011, South Sudan has been battling to draw economic benefit from its oil fields, a primary reason why Khartoum is accused of purposefully destabilising the novice country’s fledgling economy.
Currently the government of Salva Kiir Mayardit still pipes crude north of the border for processing and exportation up north.
But all that is set to change with the news of the billion dollar deal that South Africa’s Central Energy Fund has signed with South Sudan’s Nile Petroleum Corporation.
Stuck without a refinery and supporting infrastructure to truly beneficiate its oil industry, South Sudanese oil minister Ezekiel Lol Gatkuoth said the investment would not only go towards rectifying that situation, but would be used to spearhead further exploration and assist with the training of staff.
According to energy minister Jeff Radebe, a refinery in South Sudan will add 60 000 barrels a day to the country’s current capacity.
Before internecine struggles sparked the current conflict in 2013, South Sudan was producing more than 300 000 barrels a day.
These days its output, hobbled by instability and bloodshed, is half that.
Although the deal is still in its infancy, it’s said to be the biggest triumph from a three-day oil and energy conference that was held in the country’s capital of Juba.
The deal was also made possible by a recent cease-fire that was agreed to by warring parties.
Landlocked and wracked by decades of drought, South Sudan’s government is 98% dependent on revenue from its oil output.
