South Sudan and South Africa sign six-year oil exploration deal

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South Sudan and South Africa signed a six-year production-sharing agreement for an untapped exploration block in South Sudan, where production has been hit by civil war.

Reuters reports that the Exploration Production Sharing Agreement for Block B2 was signed by Ezekiel Lol Gatkuoth, South Sudan’s Minister of Petroleum and Jeff Radebe, South Africa’s Minister of Energy.

According to Radebe, South Africans had committed $50 million for exploration. He revealed that the country was also interested in building a pipeline and refinery, bringing their total projected investment to $1 billion.

Block B2 was once part of a 120,000 square kilometre area known as Block B, which was divided into three licences in 2012 and is thought to be rich in hydrocarbons, although very little drilling has been done there.

South Sudan became the world’s youngest country after it split from Sudan in 2011. It has one of the largest reserves of crude in sub-Saharan Africa, only a third of which have been explored. But production plummeted when civil war broke out two years after independence. A September peace deal is largely holding but a plan to form a unity government by May 12 has been delayed.

In April, Awow Daniel Chuang, Director General for Oetroleum at the Ministry of Petroleum, said production was expected to reach around 195,000 barrels per day by the end of the year, from 175,000 at present, and rise to 220,000 bpd by early 2020.

The government has said production would reach pre-war levels of 350,000 to 400,000 bpd by mid-2020.

 

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