The South Sudan Oil Revival: Balancing Economic Hopes and Logistical Challenges

South Sudan plans to revive its oil production, critical for its economy, despite challenges related to damaged infrastructure and ongoing tensions with Sudan.

Share:

South Sudan’s oil production, halted since February 2024 due to damage to a key pipeline connecting the country to Sudan, may soon resume. According to an official letter dated December 19 and signed by Kon John Akot, Director General of the Petroleum Authority, oil blocks 3 and 7 are expected to be operational again as of December 30, 2024. This announcement underscores the economic and political urgency for a country where oil accounts for nearly 90% of exports.

However, major obstacles remain. A communication from the Dar Petroleum Operating County (DPOC) consortium, dated December 23, revealed that several critical issues still need to be resolved before production can effectively restart. The damaged pipeline, crucial for transporting crude oil, symbolizes the region’s infrastructural and geopolitical vulnerabilities.

A Vital Sector Under Pressure

South Sudan’s economy, already weakened by years of internal conflict and heavy reliance on oil, has been severely impacted by the production halt. The export disruption exacerbated a monetary crisis, leading to soaring inflation and a collapse of the South Sudanese pound against the dollar. For a country where the majority of its 12 million citizens live below the poverty line, the resumption of oil production is seen as a glimmer of hope.

Nonetheless, the management of oil revenues remains a significant challenge. Transparency International ranks South Sudan among the most corrupt nations globally, at 177th out of 180. Oil wealth has historically been used to fund political ambitions and personal enrichment, rather than benefiting the population.

Ongoing Dependence on Sudanese Infrastructure

Despite gaining independence in 2011, which allowed South Sudan to claim 75% of the former unified Sudan’s oil reserves, the landlocked nation remains heavily dependent on its neighbor’s infrastructure for oil exports. This dependence complicates the situation, as Sudan itself grapples with a prolonged armed conflict.

Before the production halt, the country was producing approximately 150,000 barrels of crude oil per day, according to the BP Statistical Review of World Energy. Restoring this production capacity could redefine the local economic and political dynamics. However, regional cooperation stability remains a key factor.

Uncertain Prospects

While the Ministry of Petroleum has expressed optimism, delays in coordination within the DPOC consortium highlight the complexity of the situation. The letter dated December 23 emphasized the need for further discussions before any final decisions are made. These uncertainties add to the pressure on South Sudanese leaders to provide sustainable and transparent solutions.

The effective resumption of oil production could be a turning point for South Sudan, offering an opportunity to revitalize its economy. However, this revival will depend on overcoming technical and geopolitical challenges, as well as improving governance of the country’s resources.

Petro-Victory Energy announces the completion of drilling operations for the AND-5 well in the Andorinha field, Brazil, with positive reservoir results and next steps for production.
The Colombian prosecutor’s office has seized two offices belonging to the oil company Perenco in Bogotá. The company is accused of financing the United Self-Defense Forces of Colombia (AUC) in exchange for security services between 1997 and 2005.
Indonesia has signed a memorandum of understanding with the United States to increase its energy imports. This deal, involving Pertamina, aims to diversify the country's energy supply sources.
VAALCO Energy continues to operate the Baobab field by renovating its floating platform, despite modest production. This strategy aims to maintain stable profitability at low cost.
An empty reservoir exploded at a Lukoil-Perm oil facility in Russia, causing no injuries according to initial assessments pointing to a chemical reaction with oxygen as the cause of the accident.
The British Lindsey refinery has resumed fuel deliveries after reaching a temporary agreement to continue operations, while the future of this strategic site remains under insolvency proceedings.
BP and Shell intensify their commitments in Libya with new agreements aimed at revitalizing major oil field production, amid persistent instability but rising output in recent months.
The private OCP pipeline has resumed operations in Ecuador following an interruption caused by heavy rains, while the main SOTE pipeline remains shut down, continuing to impact oil exports from the South American country.
McDermott secures contract worth up to $50 million with BRAVA Energia to install subsea equipment on the Papa-Terra and Atlanta oil fields off the Brazilian coast.
Saudi Aramco increases its oil prices for Asia beyond initial expectations, reflecting strategic adjustments related to OPEC+ production and regional geopolitical uncertainties, with potential implications for Asian markets.
A bulk carrier operated by a Greek company sailing under a Liberian flag suffered a coordinated attack involving small arms and explosive drones, prompting an Israeli military response against Yemen's Houthis.
The Canadian government is now awaiting a concrete private-sector proposal to develop a new oil pipeline connecting Alberta to the Pacific coast, following recent legislation intended to expedite energy projects.
Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.