South Africa, Russia eyeing South Sudan’s oil wealth with the former planning to pump $1 billion in the country’s oil sector

Russian gas giant Gazprom Neft has signed a memorandum of understanding with South Sudan to explore four oil blocks.
The country now wants to push production back up to 350,000 bpd, the level achieved in 2011 when the country secured independence from Sudan before it slid into civil conflict.

South Africa and Russia are eyeing South Sudan oil wealth with the former planning to pump $1 billion in the country’s oil sector.

Apart from the billions its willing to spend, South Africa also plans to construct a refinery according to South Sudanese minister of petroleum, Ezekiel Lol Gatkuoth.

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The two ministers signed a memorandum of understanding on Friday which will also involve South Africa taking part in the exploration of several oil blocks, the ministers said.

“When this refinery is complete, it will have the capacity of producing 60,000 barrels of oil per day,” said Jeff Radebe, South Africa’s minister of energy.

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On the other hand, Russian gas giant Gazprom Neft has signed a memorandum of understanding with South Sudan to explore four oil blocks.

After years of infighting, South Sudan president Salva Kiir and former Vice President Riek Machar signed a peace deal in September, allowing business to slowly resume back to normal in the war wrecked nation.

According to South Sudan’s Petroleum Minister Ezekiel Lol Gatkuoth since the peace deal was signed the country’s oil production had risen to 135,000 barrels per day (bpd) from 130,000 bpd in August.

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The country now wants to push production back up to 350,000 bpd, the level achieved in 2011 when the country secured independence from Sudan before it slid into civil conflict.

The country is pegging its economic recovery in resuming oil exports, the country's biggest export and foreign exchange earner, and the government hopes investments in oil technology and power infrastructure will revive the economy.

“Exploration of oil is staging a remarkable comeback in South Sudan,” says NJ Ayuk, an energy and oil lawyer and founder of Centurion Law Group.

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Keen on reviving its ailing oil sector which funds about 98 percent of the national budget, Salva Kiir administration held its first Oil and Power Conference in 2017 amidst pessimism from observers due to the war.

South Sudan’s oil industry is dominated by Asian firms including China National Petroleum Corporation (CNPC), Malaysia’s Petronas and India’s Oil and Natural Gas Corporation (ONGC Videsh).

The second Oil and Power Conference was held on November 20 to 22, 2018.