South Sudan to borrow about $1 bln from oil firms in 2014/15 -budget
Wed Jul 2, 2014 3:25pm GMT
(Adds details from budget, background)
By Carl Odera
JUBA, July 2 (Reuters) - South Sudan plans to borrow 3 billion South
Sudanese pounds, about $1 billion at the official rate, from oil companies
during the coming financial year to help cover repayments on domestic loans
and previous oil advances, the government said in a budget document.
South Sudan has turned to oil companies before to plug a gap caused by a
drop in oil output, the main source of cash for a nation mired in conflict
since mid-December. Fighting between rebels and the government has damaged
some fields.
The budget anticpates revenues of 11.553 billion pounds for the 2014/2015
fiscal year, which is starting in July. About three-quarters of that is due
to come from oil earnings, according to the text of the finance minister's
speech dated June 25.
A lawmaker told Reuters it was presented to parliament on Wednesday.
>From those revenues, the government said, 3.711 billion pounds would be paid
to cover domestic loans and oil advances.
"In order to offset the negative impact these repayments will have on our
budget financing next financial year, we intend to borrow a further 3
billion pounds from the oil companies," Finance Minister Aggrey Tisa Sabuni
said in the speech.
He said this borrowing was "in effect rolling our obligation over until such
a time as our budget is on a more sustainable financial footing."
The amount is equivalent to about $1 billion at the official rate of 2.9623
South Sudanese pounds to the dollar. Most businesses have to operate at an
unofficial rate of a little more than 4 pounds to the greenback.
The minister did not name the oil companies which would be approached. The
main investors in South Sudan include China National Petroleum Corp (CNPC),
India's ONGC Videsh and Malaysia's Petronas.
The budget document detailed previous borrowing from companies, saying that
as of June 25 it still owed CNPC $256 million and trading firm Trafigura $78
million.
The document said projected revenue was based on oil output's rising to
260,000 barrels per day by the end of the year from 180,000 bpd at the start
of the year, an apparent reference to the fiscal year although it did not
specify.
An oil ministry official last month put production in late June at about
160,000 bpd.
($1=2.9623 South Sudanese pounds at the official rate) (Reporting by Carl
Odera; Writing by Edmund Blair and Drazen Jorgic; Editing by Robin Pomeroy)