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Row with South Sudan costs Sudan US$ 2.4 billion

Oilfield Technology,

Since Sudan’s most recent dispute with its southern neighbour began, it has cost the country somewhere in the region of US$ 2.4 billion and has been attributed to a staggering 83% drop in exports.

A dispute over oil transit fees between Sudan and South Sudan led to the South eventually shutting off all oil production in order to prevent its supplies from what it viewed as theft by Sudanese authorities. Sudan wanted South Sudan to pay US$ 36 per bbl of oil that was transported through Sudanese pipelines, however this was not accepted by the South which insisted on a fee of US$ 0.70 per bbl. Khartoum began to seize shipments of South Sudanese oil after it failed to received what it felt was adequate payment.

South Sudan relies solely on Sudanese pipelines in order to export its oil, which made up 98% of national revenues before the shutdown.

Ramping up production

Despite having only recently regained control of the disputed town of Heglig from Southern forces, Sudan has announced its intention to boost oil production in the region to 80 000 bpd.

Heglig is key to Sudan’s economy, accounting for approximately half of all the country’s current daily oil production of 115 000 bpd.

The group which operates the field, the Greater Nile Petroleum Operating Company (GNPOC), announced in March its intention to increase production at Heglig from 60 000 bpd to 70 000 bpd. However, it is as yet unclear as to whether any damage caused by South Sudan’s brief occupation of the area will delay the proposed increase in production.

Edited from various sources by David Bizley

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