South Sudan is leaving its violent past behind as the country finally heads towards lasting stability.
Boasting the third-largest oil reserves in sub-Saharan Africa, South Sudan is the only mature oil producer in East Africa. The country is one of the oldest producers on the continent, with substantial proven reserves of close to 3.5 billion barrels of oil and 3 trillion cubic feet of gas.
Dr Arkangelo Okwang Oler, Director-General for Planning, Training and Research at South Sudan’s oil ministry, spoke at the recent Africa Oil & Power 2019 conference in Cape Town, reassuring investors that now is the time to invest in the country.
According to Dr Oler, South Sudan’s oil production has increased and once they have fully accessed a new oil field, 5A, they can expand production. He says, “We’re currently processing 178 000 barrels but this is without 5A, once this agreement is processed we should be able to get an additional 16 000 barrels per day bringing us up to 194 000 bpd.”
However, there’s plenty of untapped potential in the young country as up to 70 per cent of South Sudan remains unexplored for oil and gas.
South Sudan: “A beacon of hope and peace”
Before 2012, when the five-year civil war brought the country’s oil industry to a virtual standstill, some 350 000 bpd were being produced. Dr Oler explains that they are working to reach those same pre-war levels but have not set a time frame for achieving the target.
The government is also addressing the world’s perception of South Sudan. In late September this year, First Vice-President Taban Deng Gai addressed the United Nations General Assembly, assuring members that the country could become “a beacon of hope and peace”.
Gai told the Assembly that South Sudan is now heading towards lasting peace and stability. He credited success in the on-going implementation of the 2018 Revitalized Peace Agreement to the engagement of different parties, and urged the international community to support efforts to bring non-signatories “on board”.
A face-to-face meeting between President Salva Kiir and Rick Machar in October offered an opportunity to deliberate issues and pave the way to establish the new Government of National Unity by November 12.
During his panel discussion at AOP 2019, Dr Oler also allayed fears of would-be investors, reassuring them that the country is ripe for investment and that the government is addressing various problems.
“We are working on improving the value chain and infrastructure as this is all part of the reforms we’re working on in the petroleum sector, but are also applicable to other sectors in the country. Some of the reforms are already being implemented while others are in the pipeline,” Dr Oler explained.
He went on to explain that the government has already addressed on-going issues with neighbouring Sudan saying, “We export goods through Sudan, paying them the agreed-upon fees set out in the 2012 co-operation agreement. When we went into a crisis some arrears accumulated but we have since paid off the arrears and we are on good terms.”
He added, “South Sudan’s challenges are no longer significant, we’re creating an environment for investors. There are hotels and offices and we’re building up the infrastructure. Juba is a growing city, it can be a challenge getting to other towns as the roads are in poor condition but they are usable. There’s also a public transport system and business has not stopped.”
The oil ministry is working to attract more investors into the country. According to Dr Oler this will be a transparent process, with strict measures in place to ensure any operators working in the country are above board and use only responsible environmental practices. The government has also committed to conducting an environmental audit ahead of any new exploration and drilling.
This echoes President Salva Kiir’s warning that the government is taking a strong stance against pollution in oil-producing areas. While authorities are eager to welcome new exploration and production, companies would be held to a high standard.
President Kiir warned, “I will not tolerate irresponsible activities in the oil sector”, as the era of “bad business” comes to an end.
The government also plans on launching its 2020 licensing round at South Sudan Oil & Power 2019 in Juba on October 29-30 (www.ssop2019.com) . It aims to use the conference to showcase the country’s recent growth and positive changes in the last year, as well as to improve the understanding of the country’s oil sector.