South Sudan Announces Plans to Resume Oil Production by December 2024

South Sudan plans to resume crude oil production on December 30, 2024, after recent disruptions caused by conflict in Sudan. Although production has not yet restarted, the government is working with Dar Petroleum Operating Company to resolve outstanding issues. The country faces ongoing economic and humanitarian challenges despite its oil wealth.

South Sudan has announced its intention to restart crude oil production, with a target date set for December 30, 2024, following the disruption caused by recent conflicts in neighboring Sudan. The National Petroleum Authority’s Director General, Kon John Akot, indicated that the resumption would primarily focus on production operations in blocks three and seven, which are crucial to the country’s oil revenues. Prior to the disruption, South Sudan was exporting over 150,000 barrels of oil daily through pipelines to Port Sudan, where transit fees were allocated to Khartoum.

Currently, the crude oil pipeline remains impaired, following violent clashes between the Sudanese army and the Rapid Support Forces in February. The economic implications of this disruption have been severe for South Sudan, a nation rich in oil but suffering from chronic instability, ethnic conflict, and extreme poverty.

A recent correspondence from the Dar Petroleum Operating Company (DPOC) highlighted several unresolved issues that need to be addressed before production can officially resume. It emphasized, “Once these issues have been satisfactorily resolved, a final decision regarding the resumption Kick-Off Date can be determined and approved.”

South Sudan, having gained independence from Sudan in 2011, controls approximately three-quarters of the formerly united oil reserves. However, despite this wealth, the country currently faces dire challenges, including a cholera outbreak exacerbated by ongoing displacement from the conflict in Sudan, placing further strain on national resources and public health systems.

South Sudan, the world’s youngest nation, gained independence from Sudan in July 2011, taking with it most of the oil reserves previously held by Sudan. Despite possessing significant natural resources, including large oil reserves, the nation has faced persistent socio-economic challenges, including internal conflict, governmental instability, and pervasive poverty. The disruption of oil exports due to conflicts in neighboring Sudan has led to severe economic repercussions, emphasizing the fragility of South Sudan’s economy and infrastructure.

In summary, South Sudan’s announcement to resume oil production reflects a strategic effort to restore its economy following major setbacks due to the conflict-related disruption of its crucial oil pipeline. While the December 30, 2024 target date sets a clear timeline, the situation remains precarious as outstanding technical issues and the country’s broader context of instability pose significant challenges. Continued coordination with operating partners and addressing pressing humanitarian concerns will be paramount for the government’s recovery ambitions.

Original Source: www.barrons.com