South Sudan’s Oil Taps are Open

Oil and Gas

South Sudan will renew drilling in northern Unity State for the first time since the fields were destroyed when the conflict began in late 2013. Dier Tong Ngor, Governor of the Bank of South Sudan, told reporters that the resumption of oil production in the northern parts of the country will bring in much-need foreign currency to support import of essential commodities and stabilize the economy.


Given the increase in oil production and oil prices, we will be accumulating more foreign exchange reserves that will meet the foreign exchange needs in our country, we are very certain about that,” Ngor said.


He stated further that the rising oil prices and the recently signed peace agreement will enable the conflict-torn country to widen its revenue base and increase its dwindled foreign reserve.

All key economic indicators and the peace deal mean that oil production will continue to increase. With the improving international oil prices, we are able to build foreign exchange reserves to meet market needs,” Ngor said.


Sudan and South Sudan are the 7th largest oil producing African Countries and the 35th largest oil producers in the world. Most of the oil production capacity is now in South Sudan after it gained independence from Sudan in 2011. According to the World Bank, South Sudan is the most oil-dependent country in the world; oil accounts for the bulk of its exports, approximately 60% of GDP and more than 95% of government revenues. After the civil war outbreak in late 2013, oil production declined from 350,000 barrels in 2011 to less than 130,000 barrels. The combination of the sharp drop in oil prices (from $110 per barrel in 2014 to roughly $50 in 2017) and the reduction in oil production as a result of the country’s unrest sharply reduced the growth rate. Most of the oil rigs were shut down or destroyed.   The fighting that claimed a lot of lives also resulted in Economic crisis and persistent increase in the general price level of goods and services. President Salva Kiir and opposition leader Riek Machar however finalized and signed a ceasefire agreement in Khartoum on Sunday, August 5 2018.



In September 2018, the Petroleum Minister Ezekiel Lol Gatuoth said contracts had been extended for China National Petroleum Corporation (CNPC), South Sudan’s state-run Nile Petroleum Company (Nilepet), Malaysia’s Petronas and India’s Oil and Natural Gas Corporation (ONGC Videsh).

We have extended block 1, 2 and 4 for six years and eight months. They will continue operating there. It is a win-win for all of us,” The government  said it expects to hit peak oil output of 350,000 barrels per day (bpd) by mid-2019 as production ramps up at oilfields that were off line due to the violence.


Production of Nile blend crude has recently restarted from six wells in Toma South oil field following rehabilitation work, Gatkuoth confirmed. The field, which straddles blocks 1/2/4 operated by DPOC, come on stream in recent weeks and is producing 20,000 b/d, he said. Together with some 130,000 b/d of Dar blend crude from Blocks 3/7 in the northeastern Upper Nile state and 4,000 b/d from Block 5A operated by Malaysia’s Petronas, the country is now pumping about 165,000 b/d.


China already dominates South Sudan’s oil industry with CNPC operating the country’s Dar Petroleum Operating Company (DPOC) and Greater Petroleum Operating Company (GPOC) consortia which are producing all the country’s oil.

Source of Image: oil

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