Tuesday, June 15, 2021
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Sudan and South Sudan sign oil production agreement

EAST African countries Sudan and South Sudan have signed a number of agreements that involve oil production in the two countries. The countries have agreed upon the need to increase oil production in South Sudan, to use and benefit from the expertise and capabilities available in Sudan, and to speed up procedures to open an coordination office in South Sudan.

They also agreed upon the need for cooperation through training centres, laboratories, refineries and other facilities in Sudan, the establishment of a partnership working in the field of seismic survey data processing, and the possibility of adding additional quantities of crude oil to the El Obeid refinery. Additionally, the need to open border control posts between the two countries to alleviate trading obstacles.

South Sudan’s relationship with its oil and gas reserves has been troubled and ambivalent. Ever since its first day of existence oil was Juba’s immediate opening to generate a steady flow of government revenues that could rejuvenate the country’s war-torn economy. To a certain extent, South Sudan did manage to maintain a level of production feasible enough to resolve the quintessential issues.

Just as South Sudan’s oil production was nearing its 2020 objective of 200kbpd, Covid-19 has adversely affected the country’s output rates, decreasing it by 20-25kbpd. Fears of the pandemic spreading have also delayed the commissioning of South Sudan’s first refinery in Sabinat, which albeit at a mere 8kbpd capacity could substantially improve oil products’ availability. Ever since South Sudan became independent in 2011, it made only one minor discovery last year in Northern Upper Nile State with a 5.3 MMbbls recoverable reserves tally.

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