Oil production to resume in 3 weeks: Sudd Petroleum

March 15, 2013 (JUBA) – Sudd, a petroleum company jointly owned by Malaysia’s Petronas and Nilepet, says it will resume full oil production and export, as instructed by the South Sudanese government, within a month.

South Sudan’s oil minister, Stephen Dhieu Dau, on Thursday ordered oil companies and pipeline operators to immediately resume production of crude oil for delivery to international markets through Sudan, as part of its commitments to implement an agreement signed with its northern neighbour this week.

The minister said production would resume in blocks 1, 2, 4, 3, 7 and 5A.

“As Sudd Petroleum Operating Company, we are sure to resume full production and export in about 3-4 weeks”, Emi Suhardi Fadzil, the company’s boss told journalists at a press briefing in the capital, Juba.

According to Fadzil, Sudd operates the Block 5A concession, located in South Sudan’s oil-rich Unity state.

An ongoing dispute over oil charges in January last year prompted South Sudan to shut down oil production, accusing Sudan of stealing its oil and diverting it into other pipelines. However, the two sides signed an agreement last September, allowing Juba to resume exports through Sudan, but disagreements over border security issues delayed implementation of the deal.

Dau said the South Sudanese government was committed to the full implementation of the September agreement, particularly the resumption of oil production.

Before the shutdown, South Sudan’s 350,000 barrels per day provided 98% of the government’s revenue. The closure has also affected Sudan’s economy, which lost 75% of its oil production when South Sudan seceded in July 2011.

The minister’s order revoked an instruction issued on 14 November 2012, which instructed oil companies working in South Sudan to postpone resumption of production, due to additional conditions raised by the Sudanese government.

“The oil resumption order shall continue in all aspects to have full force and effect and be binding on the foreign oil companies and pipeline operators in the Republic of South Sudan”, Dau told reporters.

“These supplemental oil resumption orders are issued without prejudices to orders to suspend or terminate in [the] future in whole or in part the crude oil resumption [of] production and petroleum operations in the Republic of South Sudan, as permitted by law or any agreement to which the Republic of South Sudan is a party”, he added.

South Sudan gained independence in 2011 from neighbouring Sudan after fighting a protracted civil war against successive Khartoum regimes, over inequality and the separation of religion from politics and identity.

Despite a six-year peace deal and almost 20 months passing since the new nation gained independence, South Sudan and its northern neighbour have still yet to agree on the status of disputed areas, with large areas of the oil-rich border remaining un-demarcated.

(ST)