South Sudan says Khartoum to help repair damaged oilfields
Sat May 24, 2014 6:30pm GMT
(Recasts, adds quotes from the minister, updates on oil facilities)
NAIROBI May 24 (Reuters) - Sudan has offered to supply materials, engineers
and electricity to South Sudan to speed up the repair of oilfields damaged
during a five month rebellion that has cut output by a third, South Sudan's
oil minister said on Saturday.
Petroleum Minister Stephen Dhieu Dau told Reuters South Sudan's output stood
at 165,000 barrels per day (bpd), down from 245,000 bpd when the fighting
broke out in December, but that production should increase within 45 days to
three months.
At least 10,000 people have died since violence erupted in the capital Juba
and spread across oil producing regions. South Sudan is desperate to
increase production after the conflict depleted government coffers and
crippled the economy.
Dau said his counterpart in the Khartoum oil ministry has agreed to provide
support to Sudd Petroleum Operating Company and Greater Pioneer Operating
Company (GPOC), operators of the two oilfields in the northern Unity State
bordering Sudan.
"The two operators are coordinating and having meetings in Juba and Khartoum
to assess technical support that will be required," Dau said by telephone
from Juba.
Juba and old foe Sudan, from whom South Sudan ceded in 2011, came close to a
full blown war soon after independence due to a dispute over oil fees.
Though both sides backed down, a 14-month oil shutdown at the time
devastated both economies.
Dau added Khartoum had agreed to supply electricity from its Heglig oil
facility on the border of the two countries if the Unity state oilfields
were without power, though the extent of the damage to the oilfields was not
clear.
About 40,000 bpd was pumped at the Northern oilfields (Blocks 1,2 & 4)
before clashes broke out while the Tharjiath oilfield produced 5,000 bpd. No
oil has been produced at either site since December.
GPOC, the operator of the Northern oilfields, is owned by China's National
Petroleum Corporation, Malaysia's Petronas and India's ONGC Videsh.
Dau said both Northern and Tharjiath oilfields are under government control
and production is expected to resume "within 90 days" but this is not
certain yet as the security situation and the extent of damage has to be
evaluated by oil companies.
"Before the recent attack on Unity state capital Bentiu, we were projecting
that resumption should be in July but now after the recent attack we are not
sure, we have to revise the action plan that was put in place by the
operators," Dau said.
MATERIALS NEEDED
Dau said all the South Sudanese oil is pumped from Paloch - the site of an
oil complex and crude oil processing facility in the north of the country
near the border with Sudan, which hosts the sole pipeline export route.
Paloch's output fell from 200,000 bpd in December to 165,000 as replacement
parts could not reach the oil facility, Dau said, with oil companies unable
to use the White Nile River to transport spare parts on large barges due to
insecurity.
"We are working to solve these challenges by getting materials from Sudan,"
Dau said. "We expect that within 45 days to two months, we should be able to
go up to 200,000 bpd."
President Salva Kiir and rebel leader Riek Machar, Kiir's former deputy,
signed a ceasefire agreement on May 9. Though both sides swiftly accused
each other of violations, there has been no large scale fighting since then.
(Reporting by Drazen Jorgic, editing by David Evans)