Abu Dhabi: South Sudan is planning to increase its oil production in the coming days as oil prices increase following last month’s Opec agreement to cap output, a top diplomat in South Sudan embassy told Gulf News.
“We are planning to increase oil production as oil prices go up to increase our revenue and expand the ways of oil industry,” said Mayom Alier, Deputy Head of mission in South Sudan embassy in Abu Dhabi.
He did not give a specific figure to what extent output is expected to rise but said they are trying to reach the levels of 500,000 barrels per day which the country was producing when the conflict began in 2013.
The current oil production of South Sudan, which is heavily dependent on oil revenue, is about 130,000 barrels per day.
The country’s oil output plummeted due to conflict following the rebellion of former vice president Riek Machar in 2013 and the escalation of fighting in the subsequent months.
According to the diplomat, 98 per cent of the country’s budget is dependent on oil revenue and the drop in oil prices has heavily impacted its economy.
“We suffered the most due to low oil prices. Rise in oil prices is a good news for us.”
South Sudan has the third largest oil reserves in sub-Saharan Africa after Nigeria and Angola.
The main oil companies operating in the country include China National Petroleum Corporation, India’s Oil and Natural Gas Corporation and Malaysia’s Petronas.
The landlocked country does not have oil infrastructure and uses the pipeline in its northern neighbour Sudan to transport its crude oil to the international market.
South Sudan is also trying to strengthen its trade ties with the UAE, but it is yet to sign protection of investment agreement and double taxation avoidance agreement with the emirates.
“South Sudan offers investment opportunities in tourism, oil industry and in agriculture sectors for the UAE government to invest,” said Alier.
“We have enormous resources that are yet to be tapped. As the UAE mulls investment in various countries, South Sudan could be a good option in future specially in areas of food security.”
South Sudan, which gained independence from Sudan in 2011, opened its embassy in Abu Dhabi 2014.
Opec (Organisation of the Petroleum Exporting Countries) and non-Opec members reached an agreement on November 30 to slash production by about 1.8 million barrels per day starting this week to stabilise oil prices.
International benchmark, Brent surged by more than 20 per cent following the agreement and is currently trading at more than $56 per barrel.