South Sudan to build oil refinery despite oil disruption

August 27, 2024 (JUBA)- South Sudan is building a refinery despite disruption in the production and flow of its crude oil, a move that presents an opportunity for reducing logistics and import of fuel and other energy products.

The construction of the new refinery will be undertaken by Shengli Oilfield Keer Engineering and Construction Company (Sokec), a Chinese firm.

Sokec, on Friday, an agreement with the state-owned Nile Petroleum Corporation (Nilepet) to construct modern oil refinery and storage facilities in South Sudan.

The President of Sokec, Wu Song and the Managing Director of Nilepet, Muhammad Lino Benjamin signed the Memorandum of Understanding (MoU) that will see the Chinese firm immediately begin investing in the country.

Benjamin hailed Sokec for its contribution to the development of South Sudan.

“We hope you will be able to translate it into agreements and projects that we will do together,” he said at the agreement signing ceremony in Juba, South Sudan.

For his part, however, Wu said Sokec will embark on investment without hesitation to enhance production capabilities and operational efficiency.

“We will start our preparation work on the refinery and storage facilities as soon as possible,” he said.

A high-level delegation from the Chinese firm on Monday visited the oil fields in Tharjiath, Unity State, to inspect the facilities and assess the current state of the refinery operations.

Meanwhile, the director general of midstream at Nilepet, Kuol Deng Maleith said the visit by representatives of the Chinese firm represents a significant step towards modernizing and expanding South Sudan’s oil industry.

He emphasized the critical role of international investors in the continued development of the country’s oil sector and its broader economic growth.

South Sudan is one of the oil-producing countries, but it has not since seceding from Sudan established and operated an oil refinery. The construction and completion of the new refinery is envisioned to end dependence on imports of these fuels. It will also solve their longstanding logistics problem.This will also mean cheaper petrol for South Sudan since importation costs would be reduced.

Others hope that a refinery deal will reduce the cost of middlemen who often inflate the cost of doing business.

(ST)