South Africa to invest one billion dollars in South Sudan oil industry

November 23, 2018 (JUBA) – South Africa and South Sudan signed Friday a one-billion-dollar agreement to develop oil industry in the east African country and explore new oil blocks, said petroleum ministers of the two countries.

After a five year civil war, South Sudan now has to use its own resources to develop solid bases for the national economy as the international community stopped initial economic support to establish infrastructures of the new country.

Speaking to the media after the signing ceremony, South Sudan oil’s minister Ezekiel Gatkuoth told reporters he signed with South Africa’s energy minister, Jeff Radabe, a memorandum of understanding including the construction of a refinery, a new pipeline and oil exploration as well as training of workers and engineers.

“What we have signed this morning is a cooperation deal between our two national oil companies, Nilepet and South Africa Energy Fund (and) the funding will come from Central Energy Fund (CEF) of South Africa,” said Gatkuoth.

The South Sudanese minister further stressed that the one billion dollar deal will improve the national economy and create alternative routes for the transportation of the crude oil to the international market.

“We will continue to use the pipeline going to Port Sudan but for the oil that will be discovered in the southern part of the country, we will have to find a means to transport the crude and that is why it is important to have a new partner,” he added.

The new deal revives an old project of a pipeline from South Sudan to Lamu port in Kenya. But the project was abandoned after reports saying that such a pipeline would take three years to build and cost up to four billion US dollar.

For his part, the South African oil minister said the new refinery will produce 60,000 barrels of oil per day, adding “it is a very huge investment”.

Radabe further announced that his government will donate a mineral laboratory to South Sudan’s petroleum ministry as part of his government commitment to the deal.

South Sudanese economy is dependent on oil revues while the petroleum industry is controlled by Asian firms from China, India and Malaysia.

At the independence from Sudan, South Sudan oil production was at 350,000 barrels per day (bpd). Currently, the country is producing 135,000 bpd, but Minister Gatkuoth several times said his government is actively working to increase it to reach its level of July 2011.

(ST)