Sudan’s oil production slumped to 120,000 barrels after the East African country lost three quarters of its previous production figure to South Sudan when the latter seceded to form an independent state in July 2011. Land-locked South Sudan halted oil production in January this 2012 following a bitter row with Sudan over transit fees.
After the two countries fought a brief war in April 2012 around border oil fields, however, they resumed talks and managed to trash out a deal whereby Juba will pay transit fees of about $9.10 and $11 a barrel as well as $3.08 billion in assistance to help Sudan overcome the loss of oil.
Sudan says that resumption of oil operations hinge on South Sudan’s implementation of a deal to secure the 1800-km borders between the two countries through the operationalization of a demilitarized buffer zone and cessation of support to rebels in Sudan’s border regions of South Kordofan and Blue Nile.
Chinese companies dominate the oil sector in both Sudan and South Sudan.
The Sudanese oil minister, Awad Ahmad al-Jaz told Reuters in October 2012 that oil production will reach 150,000 barrels per day (bpd) by the end of 2012 but this figure contrasts with that of the International Monetary Fund (IMF) which projected, in its annual Sudan report earlier this month, that oil production will likely drop by 60 percent in 2012 before starting to increase again.
"[O]wing to waning mature fields (higher quality Nile blend) and other technical production problems, 2012 production is expected to sharply decline by 60 percent to 117 to 120 thousand barrels per day (bpd)," said the IMF report. "Enhanced recovery in existing fields and further exploration will likely help production to increase again starting in 2013, with a peak expected in 2020 at near 240 thousand bpd, before a gradual decline to about 144 thousand bpd begins in 2030".
Sudan is had been one of China’s top foreign suppliers of crude oil. Sudan has recently awarded nine exploration blocks to consortia formed by companies from Canada, Brazil and the Middle East.
Sudan is also conducting oil exploration activities in Block 12B southeast of the western region of Darfur, the scene of a nine year conflict between the government and rebel groups. Darfur block will be operated by China’s PetroEnergy.
Sudan has been scrambling to make up for the loss of oil that resulted from the secession of South Sudan which contained 75% of the country’s oil reserves.
In November 2012 Al-Jaz said that that his ministry has embarked on building warehouses on the Red Sea to store crude oil and is also looking to grant a French company an exploration license for two blocs (13 & 19) in the Red Sea.
In 2012 the South Sudanese government estimated that it had approximately 1.7 billion barrels proven oil reserves. However, without new finds hoped for in Jonglei State, South Sudan will stop being a major producer of oil within the next 10 years.
Al Jazeera English | Sudanese oil interest bow to China | 4 May 2012
Al Jazeera English | Professor Paul Moorcraft talks to Al Jazeera about Sudan | 24 April 2012
Al Jazeera English | Sudan tensions imperil China’s investments | 6 April 2012
Rising tensions between Sudan and South Sudan are threatening China’s investments in the region. China is the biggest player in the oil industry on both sides of the border. Traditionally a key ally of the Khartoum government, China is now trying to strengthen relations with the South as well. Al Jazeera’s Nazanine Moshiri reports from Juba, capital of South Sudan.
Al Jazeera English | Sudanese jets attack oil pipeline | 5 April 2012
Al Jazeera crew forced to take cover, as South Sudan claims to have shot down one of planes which carried out raid. Al Jazeera’s Nazanine Moshiri reports from on the Sudan-South Sudan border.
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