Juba completes oil shutdown

South Sudan minister claims some oil companies were cheating the government by concealing the actual amount of oil being produced daily.

Monitor Correspondent
Juba.

South Sudan said yesterday it had completed the shutdown of 871 oil wells that were producing about 350,000 barrels per day. The wells were shut down in Unity and Upper Nile states, where the country’s crude output of Nile and Dar Blend are produced, Information Minister Benjamin Barnaba Marial said.

“The shutdown of oil is complete, and it has been a blessing in disguise because we discovered that certain oil fields were being undercounted,” Dr Marial told reporters. “In case of Greater Nile in Unity State, they were saying there were 230 wells. They have turned out to be 271,” he said, referring to a company operating in Unity State.

The other 600 wells are in Upper Nile State, a PetroDar holding. Recently, the government accused PetroDar of producing 40,000 barrels per day that it kept secret. South Sudan, which seceded from Sudan and became independent in July last year, accounted for over 75 per cent of crude oil that Sudan previously exported but it has no oil pipelines.

Protesting theft
The Africa’s infant nation relies 98 per cent on oil revenues but it opted to shut down her oil production in protest against oil theft en route to the export terminal at Port Sudan along the Red Sea coast.

Both Sudan and South Sudan, in talks mediated by the African Union in Addis Ababa, have failed severally to agree on a fair oil transit fees. The gap is too wide, with Sudan demanding $32 per barrel while South Sudan proposes $1 per barrel.

Delegations from the two sides are scheduled to meet on Friday in Addis Ababa to try to reach a fair deal, more than a week after President Salva Kiir and his Sudanese counterpart Omar al-Bashir failed at the recent African Union summit in Addis Ababa. China has also tried to mediate talks between the countries without much success.

President Kiir wanted the agreement to be “comprehensive” to include the status of the disputed Abyei region and demarcation of the borders. However, South Sudan says the shutdown of the oil production has enabled it to know how much oil it has.

“I am sure if there was no shutdown, we would still be hanging, thinking Khartoum would become reasonable and charges costs which are actually internationally recognised,” Dr Marial said.