South Sudan is making plans to resume crude oil production following months of halted operations due to damage to a key pipeline caused by conflict in neighboring Sudan. According to documents reviewed by AFP on Tuesday, the young nation’s government and oil sector stakeholders are working to address lingering concerns before production can officially recommence.
The pipeline, which transports oil from landlocked South Sudan to Port Sudan on the Red Sea for export, was critically damaged during clashes in February between Sudan’s army and the paramilitary Rapid Support Forces. The disruption dealt a severe blow to South Sudan’s economy, which relies heavily on oil revenue.
A December 23 letter from the Dar Petroleum Operating Company (DPOC), a consortium managing oil production in South Sudan, highlighted the need for further discussions to resolve outstanding issues before setting a “resumption kick-off date.” The letter emphasized that only after satisfactory resolutions would a final decision on restarting production be made.
Before the pipeline damage, South Sudan produced more than 150,000 barrels of crude oil daily, according to the BP Statistical Review of World Energy. The country’s oil industry has historically been a lifeline for its economy, contributing significantly to government revenue and foreign exchange earnings.
South Sudan, which gained independence from Sudan in 2011, inherited approximately three-quarters of the oil reserves from its northern neighbor. However, transit fees to Khartoum for using the Port Sudan export route have remained a significant expense.
Despite possessing considerable oil wealth, South Sudan remains one of the world’s poorest nations. Years of ethnic violence, political instability, and inadequate infrastructure have hindered economic development. Natural disasters such as flooding and droughts have compounded these challenges, leaving millions in need of humanitarian assistance.
The current situation is further strained by a cholera outbreak in northern regions of South Sudan. These areas have become a refuge for many fleeing the violence in Sudan, exacerbating public health crises. Aid agencies have warned of dire consequences without urgent intervention to curb the outbreak and provide relief to displaced populations.
Resuming oil production could bring much-needed revenue to South Sudan, offering a chance to stabilize its economy. However, addressing internal governance issues, ensuring infrastructure security, and mitigating the impact of humanitarian crises will be essential for the country to capitalize on its natural resources effectively.
