Home | News    Thursday 27 October 2011

South Sudan oil production seen shrinking by half: IMF


October 26, 2011 (WASHINGTON) – The International Monetary Fund (IMF) on Wednesday sounded a warning bell to South Sudan, saying that the newly established nation will see diminishing oil production levels in less than ten years.

In its report on oil exports in Middle East, North Africa, Afghanistan and Pakistan (MENAP), the IMF noted that South Sudan relies on oil for 98% of its revenue making it almost entirely dependent on crude exports.

“[B]ut [South Sudan] faces a potentially rapid decline in production as known reserves dwindle,” the report said.

South Sudan officially became an independent state last July after its citizens voted almost unanimously in favour of secession from the north during the referendum held last January.

Prior to the country’s breakup, north and south Sudan split oil revenues by almost 50% in the 2005 peace agreement. Southerners were hoping that separating from the north will give them full control over their oil wealth particularly amid allegations that the north was underpaying the south its share.

But landlocked South Sudan cannot export its oil except through the pipelines running through the north all the way to Port Sudan on the Red Sea. The two countries are still negotiating on a fair fee for the use of the north’s infrastructure.

Khartoum said that it wants a deal reached by the end of October, warning of other options if that doesn’t happen. The north is encountering severe economic challenges with the loss of the south’s oil fields and needs a steady source of income and hard currency.

The IMF said that oil production in South Sudan ’already started falling from its 2009 peak of about 360,000 barrels per day and, barring new discoveries or improved recovery, it is likely to halve by 2020.’

To prepare for this, South Sudan must take measures that would maximise the benefits created by the oil wealth.

’Thus, there is a small window of opportunity to put the oil windfall to good use. However, given absorptive capacity constraints, investment must take place gradually while the oil wealth is saved and capacity improved. An immediate challenge is for the country to establish the credibility of its macroeconomic policy framework, including monetary operations,’ the IMF said.

South Sudan produces around 300,000 bpd and since independence has contracted oil sales worth $2.14 billion.

Despite having a per capita income of $1,000, more than twice the average of its neighbours, South Sudan is totally underdeveloped and has less than 100 km of paved roads.

’Its human and physical capital levels are extraordinarily low, and literacy and road density rates rank below those of neighboring countries despite higher income levels,’ the IMF said in its latest regional outlook released last September.

South Sudan needs to establish immediately ’the credibility of its macroeconomic policy framework, including monetary operations,’ the IMF said.


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  • 27 October 2011 08:50, by LongTweng

    a big white lie by IMF to fool those leaders who just listen everything the pass through their ears.

    • 27 October 2011 10:18, by Waucity

      Our shameful politicians went on to say that English should be the only language taught in school, now the population does not understand anything. Those of you who speak dinka and write it need to schools because if the population is not aware of its problems it will not think of solutions to them...By teaching them in the language the understand, they will become aware and will find solutions

      • 27 October 2011 10:56, by Okpolo

        Wau city are you suggesting that the message should have been written in Dinka language or what. It is a government policy and the constitution supports it that the official language of the Republic of South Sudan is English. If you were schooled in Arabic or French language, it’s now time for you to use English language. Even those who do not understand English now will understand it with time.

      • 27 October 2011 17:31, by Abyei Soil

        I do not got what you said well Waucity, what do you propose? English language or Dinka language? Answering me will be highly appreciated, thanks. As a matter of IMF statement has nothing to change or to add in our oil reserves. Everything will be in right place by work of our own hands. Foreigner is nothing but to reduce our wealth. For me I will do my best for my country. I am ready. I don’t kno

      • 28 October 2011 20:45, by whatsayyou

        Mr wau city you got it wrong,do not abuse the gov’t for nothing, what do you mean by official language? not every language can be official in a country,according to south sudan constitution english is an official language, but other languages are also allow to be spoken and this is why there are FM radios in every state ,that is a work of the gov’t you are abusing for no reason.

    • 27 October 2011 14:23, by angunliach

      Dear All,
      Let me ask the following questions:
      1-Have we sold any barel to the world market since the independent?
      2-Do we have oil factories in the south?
      3-Do our government signed any treaty with IMF?

    • 27 October 2011 14:32, by angunliach

      Wau city,
      National language is a language that bring unity,understanding and peaceful co-existence of inhabitants,it has nothing to do with Dinka or any other tribes in the South.

    • 28 October 2011 05:40, by Patrick Loturi

      Oil is a non-renewable resources my people.Depending on oil will not develop South Sudan. IMF might be an organization led by a white man, but oil will come and disappear, it is therefore important for us to think of phrases such "oil curse" and "The Dutch Disease" all which has to do with limited resources in the school of economics. The prosperous will be those who think of diversification.

  • 27 October 2011 08:55, by MINDED.DUDE

    IMF is parasite Agency ,and their work is to put you into heavy debt so that you become fail and heavily debt state.
    why they do not talk about Somalia and other countries dont have oil?
    Oil is not everything .

  • 27 October 2011 09:03, by Master

    Im so sorry for your loss. Im sure it must hurt when it comes from an organisation to tell you this. But when it mentions sudan’s economy is slowing down - you’re all soo happy. It must even hurt more when reports state that North Sudans oil production will increase this year and double in 3 years.

    P.s You will still have to pay trasit fees. Even more painful

    God help South Sudan

    • 27 October 2011 13:29, by Agutran

      When was the oil discovered in Sudan? When did South Sudan started to depend on oil revenue? If you know precisely the timing of these two questions, then, you’ll have no any objection that the IMF report is absolutely meaningless!! For those on board with the IMF, you’re on a long road to the reality destination.

    • 27 October 2011 15:25, by pabaak

      IMF might be talking about one oil field in South Sudan but you have many fields are still available, one time they said we are sitting on the oil fields. if Saudi Arabia still a leading oil producer after many years, then what should led our oil dried up quickly like that, I doubt it.

  • 27 October 2011 09:47, by Deng Dut

    Hi Mr. Master do not be sarcastic. Anyway, for IMF they want us to take loan from them so that we may be slave to them like what they have done to other underdeveloped nations for "A debtor is always a slave to the creditor". I hate every arm of UN because they’re mammon and they use anything to instigate violence and cause panic. This are 100 % liars.

  • 27 October 2011 10:06, by Bazinguaboy

    Sentiments aside whether or not the IMF is lying, let’s not turn a blind eye to the fact that we have been warned and that the IMF did give us some sound advice on austerity measures. Come to think of it, President Salva Kiir himself did mention recently that the oil revenue would be used to fuel agricultural production. That, I think, is the right way forward - not just crying foul on the IMF.

  • 27 October 2011 11:04, by Okpolo

    This should not scare South Sudanese. All over the world lifespan of oil reserves have been projected by various estimates. If well utilized and invested even an oil boom lasting only five years could be helpful to a country.
    Anyway which oil producing country has stopped oil production because its reserves have been exhausted. Some of these projection by the world bodies are just scarecrows!

  • 27 October 2011 19:46, by Ngonglok

    Regardless whether IMF is doing a scare tactic or not doesn’t matter. What matters is that South Sudan’s 98% of revenues are generated through oil. To me that is a shame, a country as wealthy as ours should not be depending on oil alone. These politicians of ours are not economically equip for these jobs they are doing. It is time for Dr. Garang children to take over—The Lost Boy

  • 27 October 2011 20:05, by Father of earth and heaven

    Some people here need to understand the IMF tone, if south Sudan want to build its City and infrastructures where do you think the money will come from?
    To my business knowledge if south Sudan borrow money from IMF will it be able to pay in ten years to come or after sometimes. this is good the IMF signal this out because some people in south Sudan are working for themselves.

  • 3 November 2011 19:00, by Northern Sudanese


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