Business | Oil & Gas

South Sudan to cut oil output

Dispute with rebels could lead to full shutdown

  • Reuters
  • Published: 17:33 July 19, 2013
  • Gulf News

Juba: South Sudan will cut oil output to 100,000 barrels a day over the weekend as it moves toward a full shutdown, its foreign ministry said on Friday, in a dispute with Sudan over rebels that operate across their shared border.

Sudan, from which the South seceded in 2011, said a month ago it would close two cross-border oil pipelines within two months and insisted that oil production by shut by August 7 unless South Sudan gave up support for the rebels. Juba denies providing such support.

The move is a blow to the economies of both sides, which were hit hard by South Sudan’s 16-month oil shutdown in a row over pipeline fees and disputed territory. Flows of oil, the lifeline for both, had only resumed in April.

Juba said on Thursday it had started shutting output to 160,000 bpd, down from 200,000 bpd.

“It should go down to 100,000 over the weekend, and then next week it will continue to go down from there,” said Mawien Makol Arik, a spokesman for the foreign ministry in Juba.

Sudan has not commented on Juba’s decision to reduce its oil flows. Reuters has been unable to reach the oil and foreign ministry in Khartoum since Thursday.

Landlocked South Sudan needs to export its crude through the Sudanese port of Port Sudan. Its previous shutdown started in January 2012 and affected its entire production of around 300,000 bpd as the two countries disputed oil fees, border security and territory.

Sudan has allowed the sale of oil that had already reached its territory after it informed Juba in June it would halt flows unless support for rebels stopped.

Khartoum accuses Juba of supporting the “Sudanese Revolutionary Front”, an umbrella of groups operating in the borderlands, which complain of neglect at the hands of the wealthy Arab Khartoum elites.

South Sudan in turn accuses Sudan of backing rebels in its Jonglei state, where escalating fighting is making it impossible to realise government plans to search for oil with the help of France’s Total and U.S. Exxon Mobil.

The main foreign firms operating oilfields in South Sudan are China National Petroleum Corp, Malaysia’s Petronas and Indian firm ONCG Videsh.

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