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Sudan conflict is affecting South Sudan oil sector – minister

The ongoing conflict in Sudan has affected South Sudan’s oil sector, a South Sudanese minister said on Friday.

Speaking to reporters after the cabinet meeting in Juba, Information Minister Michael Makuei said some contractors have ceased operations and foreign workers are leaving the oilfields due to fears of insecurity in Sudan.

“Companies that have been subcontracted in the oilfield are running out of fuel for running their machines and cars, and the staffs are going away, so there is a problem being faced in the oil sector,” he explained.

Makuei revealed that the ongoing war in Sudan has resulted in a drop in prices of crude oil exported from Port Sudan to the international market as buyers want to take advantage of the current situation in Sudan.

“Prices of oil have been fluctuating from 100 to 80 and to 70 US dollars per barrel, and as of now, the prices are negotiable from 70 US dollars downwards as the case might be. If you get a contractor who is ready to take the risk, he will come and say I will buy, but he will try to buy at that low price so that he can make more money because these days, people exploit the situation because if you are in need, then you will be exploited,” Makuei said.

Makuei stated that the government of South Sudan is exploring an alternative oil export route through Ethiopia to Djibouti Port in a bid to reduce its dependence on Sudan.

“We have to find other means of evacuation, one of them is the Pagak road to Ethiopia from Ethiopia to Djibouti, and this is the nearest. We can even use tankers, for that matter, to export the oil,” he stressed.

He revealed that the government will also expedite with immediate effect the construction of the road from the Bentiu oil refinery to Gogrial so that the processed oil is evacuated to give room for storage.

“It is directed that the Ministry of Roads, as well as the Ministry of Petroleum, should work hard to ensure that the Bentiu refinery is operational and that the routes of evacuation and storage are made available so that we can refine our oil instead of subjecting it to the current situation again,” Makuei said.

South Sudan, which seceded from Sudan in 2011 after a civil war that lasted decades, exports its oil output of 170,000 barrels per day via a pipeline through its northern neighbour.

South Sudan relies on foreign currency from crude oil sales, which comprises around 95% of public revenue.

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