Global demand for oil appears to be picking up as many countries around the world ease Coronavirus lockdown regulations. This bodes well for oil-producing nations, who were forced to cut production after international travel basically ceased, causing a massive drop in demand and a resultant plummet in oil prices. Countries like South Sudan, whose fiscus relies heavily on oil revenue, were particularly hard hit. The country has been working on increasing its oil production, which was badly affected by years of conflict. 

The Al Toors Oilfield in South Sudan

Speaking in June, Hon. Eng. Awow Daniel Chuang, Undersecretary at the Ministry of Petroleum, explained the situation, “South Sudan can produce oil in three areas, but we are currently only producing in two. Blocks 3 and 7 in Great Upper Nile is producing around 130 000 bpd which sometimes drops due to logistic and other challenges. In Blocks 1,2 and 4 we are producing around 52 000 bpd. Our total production is currently at between 170 000 and 172 000 bpd, although our projection was at 190 000 bpd. Unfortunately, production has dropped a bit because to the Covid-19 pandemic.” He adds that the pandemic has mainly affected logistics, as no planes have been flying, workers have not been rotated and materials have not been delivered on time. Before Covid-19, production from the two operational areas was running at a range of 180 000 to 185 000 bpd. 

The government is now looking to Block 5A to provide the next production boost. Located in the Tharjath field, it has a production capacity of 10,000 to 15,000 bpd. Block 5A was shut down due to the conflict in 2013, and now plans to resume production are gaining momentum. Juba-based Political and Economic Analyst, Akol Dok, says, “The government and its partners have now agreed on a framework that by the end of this year, and the beginning of 2021, Block 5A will be producing oil.” He says this will have a great impact on the economy as it will increase revenue for the administration, providing more funds for infrastructure and development projects that form part of President Salva Kiir’s plan. 

The Ministry’s next targets are 220 000 bpd and 250 000 bpd sometime next year, with the potential to reach 300 000 bpd by around 2022. 

Besides the current logistic problems, the country faces other challenges in the oil sector. A shortage of experienced technicians and engineers is affecting development of the industry. Chuang says this issue is being addressed, “There are now plans to speed up the training process. We are constructing a training centre to cater for engineers, geologists and administrators, to service the oil industry.”

Another major problem is of a technical nature. The country has a relatively low production extraction rate, which is hampering oil production levels. Chuang explains, “Recovery factors are very low in South Sudan and this is a major problem. We have in the past struggled to improve recovery factors for hydrocarbons and need more investment and modernisation.’ 

And this is why the country is launching new licensing rounds. It hopes to attract investment in the sector, believing that exploration by new companies will see more oil discoveries, which can only benefit the country, and its people.

KeyFacts Energy Industry Directory: AZ Media PR