Optimism skyrockets in South Sudan oil sector


Updated: March 7, 2021

South Sudan oil and power 2018 conference has ended in Juba with one positive sign: tremendous progress is being made in the oil sector, following a successful peace deal last month, and power-sharing arrangements between President Salva Kiir and opposition leader Riek Machar.

At the conference in the South Sudanese capital attended by over 750 participants, including more than 400 international and local companies, the East African country called on prospective investors to tap into the 3.5 billion barrels of oil reserves in South Sudan, the third largest in Africa.

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“Do business or get out,” South Sudan’s petroleum minister, Ezekiel Lol Gatkuoth, said in an interview with The Associated Press on Wednesday.

The government is offering investors several incentives, including a tax-free grace period of up to 10 years.

The hope, according to reports, is to return to the pre-conflict production of 350,000 barrels per day after losing almost $4 billion to a five-year conflict.

AP reported that earlier this year, Russian oil company Zarubezhneft signed a memorandum of understanding with South Sudan’s oil ministry to explore the 10 oil blocks that remain open. The government is also speaking with Russia’s third largest oil producer, Gazprom Neft, and Rosneft.

It said those already licensed to operate in the newly reopened oil fields in Unity State are China National Petroleum Corporation, India-based Oil and Natural Gas Corporation and Malaysia-based Petronas.

“And early next year local oil marketing company Trinity Energy will begin building East Africa’s only oil refinery, a $350 million project that will take about 18 months to complete. It will be able to produce 25,000 barrels per day,” AP added.

Currently South Sudan exports its crude oil, only to buy it back because of lack of refineries. 

Participants at the South Sudan’s oil and power 2018 conference this week came from the upstream, midstream and downstream sectors of the oil sector from Africa, Europe, North America and the Middle East. 

In a statement,  the African Energy Chamber said it was encouraged by the progress made in South Sudan’s oil sector after the peace agreement.

It described the success recorded at the conference as a step in the right direction. 

“We are also encouraged by the Ministerial delegations from many countries like Equatorial Guinea, Sudan, Somalia, Saudi Arabia, Nigeria, Russia, Uganda, etc.”

The African Energy Chamber said the success is an indication of South Sudan’s increased attractiveness for African and international investors, even as the East African nation works to ensure a stable peace and doubles efforts to ramp up production and drill more wells.

“The presence of several international oil companies in Juba this week is very encouraging and shows that South Sudan is doing its best to restore the trust of the international investment community and should be encouraged by all parties,” declared Executive Chairman NJ Ayuk form Juba.

The Chamber supported South Sudan’s efforts to build a lasting peace, which resulted in a new peace agreement signed last month between rival factions.

“The local and international oil community has an obligation to support both peace talks and the South Sudanese leadership to promote peace and reconciliation. We also call on the government to continue its efforts in encouraging an enabling environment, promoting local content and prioritizing the role of women in the oil sector ” said NJ Ayuk.

“We commend H.E. President Salva Kiir for meeting with H.E. Azhari Abdel-Gadir Abdalla, Minister of Petroleum and Minerals of the Republic of Sudan; H.E. Gabriel Obiang Lima, Minister of Mines and Hydrocarbons of the Republic of Equatorial Guinea; Hon. Lokeris Peter, Minister of State for Energy and Minerals Development, Republic of Uganda; and H.E. Mahaman Gaya, Secretary General of the African Petroleum Producers’ Organization (APPO) to encourage collaboration on oil and gas matters.

“H.E. President Kiir and the Minister of Petroleum of South Sudan, H.E. Ezekiel Lol Gatkuoth’s continuous efforts to work with other Africans, OPEC and Non-OPEC nations in balancing and stabilizing the oil market is very encouraging to our members as we all work to prevent another supply glut in the oil sector. The Chamber continues to support all efforts to do balance the oil markets including trimming supplies as it is good for African producers, its citizens and the investors”.

The African Energy Chamber said South Sudan’s oil sector remains under-explored, despite being East Africa’s oldest and biggest oil producing nation.

Although, production is being ramped up, South Sudan’s latest oil & gas entrant, Oranto Petroleum, started exploration on Block B3 a year ago.

“South Sudan is a fantastic blank canvas … because we see that the demand is here,” AP quoted Pearl Uzokwe, director of governance and sustainability at the Sahara Group, as saying.

Sahara Group is a Nigerian energy and infrastructure company that recently signed a memorandum of understanding with the government.


Simon Ateba Washington DC
Simon Ateba
Simon Ateba covers the White House, the U.S. government, the International Monetary Fund, the World Bank and other financial and international institutions for Today News Africa in Washington D.C. Simon can be reached on simonateba@todaynewsafrica.com


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