October 4, 2012 (JUBA) – South Sudan’s minister of Petroleum and Mining, Stephen Dhieu Dau, said his ministry has begun the necessary preparations to resume oil production following an agreement with Sudan last week.
- Stephen Dhieu Dau (Getty/file)
Oil production was stalled in February following a stalemate between South Sudan and Sudan over how much transit fees the former should pay to the latter for using Sudan’s facilities to transport and process the oil.
The situation forced South Sudan to shut down the production as Sudan resorted to confiscation of oil from South Sudan through its pipeline to Port Sudan in paying off itself for the overdue fees.
South Sudan and Sudan signed an agreement in the Ethiopian capital, Addis Ababa, among which the transit fees were agreed paving the way for the resumption of the oil production.
In the first consultative meeting on Thursday with the oil companies which operate in South Sudan, minister Dhieu said the forum was coordinating plans to resume the production as soon as possible.
The vice president of Petroleum Operating Company Khalid Marol Riak told Reuters last Wednesday that they plan to produce 180.000 barrels per day within 18 weeks from Upper Nile oil fields which produce 80% of south Sudan oil.
The oil shutdown has had a negative impact on the economies of both countries, forcing the two nations to introduce austerity measures.
In South Sudan which depended on oil revenues for 98% of its annual budget the measures have affected both the civil servants and police and armed forces which have cut their salaries by almost 50% as well as development projects.
Officials however assured that the expenditures and salaries will be readjusted what they were before the austerity measures were introduced once production resumes.