Sudan expects “hike” in oil output

November 27, 2012 (KHARTOUM) – Sudan has said it expects its oil production to increase to 180,000 barrels per day in the next year, in sharp contrast with forecasts put forward by the International Energy Agency (IAE).

The world’s energy watchdog said in October that the East African nation is not expected to see any jump in oil production in the next five years despite intensified efforts by Khartoum to expand exploration. According to figures contained in the IEA’s “Medium-Term Oil Market Report 2012”, Sudan will produce 70,000 oil barrels per day (bpd) this year which will jump to 90,000 bpd in 2014 and drop to 60,000 in 2017.

But the Sudanese ministry of petroleum said, in a paper it presented during the 12th conference of the Arab minerals ministers currently held in Khartoum, that oil production will increase to 180,000 bpd in 2013. The ministry also said that the country’s oil output in 2012 stood at 39 million barrels with a daily production rate of 107 barrels.

According to the ministry’s figures, crude production in 2010 reached 168,877 million barrels while in 2011 it slumped to 206 million barrels and to 39 million barrels in 2012.

Sudan lost approximately 75% of its oil reserves following South Sudan’s secession in mid-2011 which put the country under fiscal duress with the sharp drop in revenue and hard currency inflows that resulted from the breakup.

But the government in Khartoum hoped to offset part of the deficit through charging landlocked South Sudan for transporting its oil through the north’s infrastructure. But following disagreements on the fee that should be assessed for the service, South Sudan shut down its oil production earlier this year.

Last month a deal was struck between the two nations to resume oil exports after an understanding was reached through African mediation on the transit fees. But the remittances will still fall well below what is needed to close the budget hole. The implementation of the deal has also been put on hold due to failure of security talks between the two countries.

Last July, Sudan signed oil exploration and production-sharing deals with Canadian firm Statesman Resources Ltd as well as Chinese, Nigerian, Australian, Brazilian and French companies.

Furthermore, seven blocks were awarded for the first time, while some companies joined previously awarded contracts for two other blocks.

But according to Reuters, analysts are skeptical that Sudan will increase production anytime soon as companies are expected to carry out for years magnetic studies first. Efforts to boost production from existing fields have been hampered by a scarcity of dollars needed to bring in better equipment and technology.

(ST)