17 Dec 2018

 

Sudan To Uncap Oil Production At Block 5A

The Government of Sudan will uncap oil production at Block 5A of Unity areas allowing oil producing companies to increase their production from the 5,000 barrels per day.

Sudan To Uncap Oil Production At Block 5A
Minister of Petroleum, Ezekiel Lol Gatkuoth [Photo by Ojwe Lumara]

By Ojwe Lumara

JUBA,23 November 2018 [Gurtong]-
The Minister of Petroleum, Ezekiel Lol Gatkuoth told oil companies, investors and experts on Thursday at the closing ceremony of the 2018 Oil and Power Conference in Juba that South Sudan and Sudan have agreed to uncap the bottleneck.

One month since the signing of a peace agreement, South Sudan has stepped up efforts to cooperate with African countries in the energy industry.  Sudan played a prominent role in supporting the South Sudan peace agreement and was instrumental in the resumption of oil production at the Toma South field this year.

Minister Ezekiel said production of Suud Petroleum Operating Company (SPOC) at 5A will start uncapped.

“We have agreed with Sudan to uncap because of the acidity that we have and it is very wealthy and heavy crude and the fact that we were capped by Sudan to produce only 10 percent,” Ezekiel said.

“We were producing around 5,000 barrels per day and we have a capacity to produce over 40,000 barrels per day. Because it will comingle with other block of Nile blend, we were capped. But we have agreed that we are going to uncap and we can produce more at Block 5A,” he added.

The petroleum Minister said the country plans to increase oil production to the level it was before the conflict.

“Block 3 and 7 used to produce 270, 000 barrels per day but due to the conflict, it was cut down to 130,000 barrels per day.  In Gpoc we used to produce 80,000 barrels per day but currently the production at Toma south is 20,000 barrels a day,” he revealed.

The petroleum minister further revealed that they agreed to start production at Unity oilfield by next month, saying he will lead a delegation of experts to Unity oil fields to ensure that the technicians on the ground are working so as to start producing in December.

Minister Ezekiel said South Sudan has more than five blocks available for investors.

PETRONAS one of the oil investors in South Sudan oil industry hopes to increase its oil production to 200,000 barrels per day at block 5A if its proposal is accepted by Khartoum refinery this Saturday.

Meanwhile, the chairman of Petronas in South Sudan, Mazlan Bin Tamyis in an interview on Thursday said that since 2016, they had proposed for increase in production at Block 5A but their proposal was not approved by Khartoum Refinery.

He revealed that on Saturday 24th of November, PETRONAS, South Sudan Ministry of Petroleum and Khartoum Refinery will have talks where they would possibly sign deals allowing them to produce at a minimum of 20,000 barrels per day.

According to the PETRONAS boss, increasing production is a lifeline for South Sudan’s economic recovery.

“At this moment if we are allowed to produce at a certain level, we can do it. I already mentioned to minister Ezekiel and our partner in Sudan that minimum production at this moment is at 20,000 barrels per day,” Mr Tamyis said.

The problem with this for the last five years that the production is being uncapped at only 5% from the total fluid that flows to the Sudan crude oil transportation system,” he said.
He worries that if they are not allowed to produce at minimum 20,000 barrels per day; their investment of 850 million USD cannot be recovered.

“We cannot recover our investment if we keep producing at 5,000 barrels. In each barrel we produce we are losing money. We are not making money not only to the Government of Sudan; we cannot even make the minimum economic value. The minimum we can produce to from block 5A is 20,000 barrels for the next twenty years,” he said.

 

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