South Sudan Plans to Boost Oil Production as Conflict Eases

SOUTH SUDAN (Capital Markets in Africa) – South Sudan plans to increase oil production by more than a third this year as it reopens wells in the wake of a peace agreement to end a five-year conflict that disrupted output.

The accord, signed in September, has contributed to a resumption of production at previously abandoned oil fields, the Petroleum Ministry said Wednesday in an emailed statement. The country is targeting pumping 200,000 barrels per day by the end of 2019, it said.

Crude will be sold in transparent tenders to allow the government to benefit from competitive rates, as it seeks all the income it can get to fund the peace agreement, according to the statement. The accord calls for the expansion of South Sudan’s government to include former rebels.

The world’s youngest nation slid into conflict that slashed oil production to about 120,000 barrels per day, from 350,000 barrels when South Sudan gained independence in 2011. Since the peace deal was signed, output has risen to 145,000 barrels a day, according to the IMF, which sees an additional 25,000 barrels a day by December.

The IMF has also called on the nation to stop engaging in oil advances, saying this is both expensive and opaque for the crude-dependent nation. The practice typically involves taking substantive short-term loans of two to three months from oil companies or the traders who are paid in kind. The IMF estimates that 87 percent of South Sudan’s budget is funded from oil revenues.

Source: Bloomberg Business News