How South Sudan’s Two years of war will Hamper Future Oil Production; Nation Assessing Damage

Damage to South Sudan’s oil fields after more than two years of civil war will hamper plans to boost output, Petroleum Minister Dak Duop Bischok said.

The government is currently assessing the extent of repairs that need to be made to production facilities in the northern Unity and Upper Nile states, Bischok said Thursday in an interview in the capital, Juba. The country needs the revenue from pumping more oil to tame an economic crisis, he said.

“Our interest is to increase production to improve our economy and in one week’s time we will go to the sites to assess the damages,” Bischok said.

Conflict in the world’s newest country cut oil output by a third to about 160,000 barrels per day. The country is currently only pumping oil in Upper Nile state after Unity production stalled in 2014. Before the war, China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp. produced most of the oil.

The violence left tens of thousands of people dead and 2 million displaced. A transitional government was formed at the end of April to improve economic management, boost security, reduce corruption and stamp out human-rights abuses before elections within 30 months.

The government is almost bankrupt due to sliding crude revenue, while inflation in the capital, Juba, is raging at more than 240 percent. The economy shrank 5.3 percent last year and millions of people face starvation. If the state can’t find the cash to pay the thousands of government soldiers and rebel fighters, violence could flare again.

South Sudan has sub-Saharan Africa’s biggest oil reserves after Nigeria and Angola, according to BP Plc data. Its low-sulfur crude is prized by Japanese buyers as a cleaner-burning fuel for power generation.

Bischok replaced Stephen Dhieu Dau as petroleum minister in the cabinet announced last week.


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