In a recent piece, journalist Richard Nield writes about the challenges facing South Sudan's oil sector with September being the first month since independence that the government tendered just one cargo. Juba has fallen behind in transit arrears to Sudan and the cost of production has increased because of the higher transportation and security costs due to the conflict. Nield argues that it is possible that these difficulties could lessen in coming months but it ultimately depends on parties abiding to the ceasefire.
South Sudan’s oil income has been slashed by lower output, falling global prices, and an increasing production share taken by the government’s upstream joint venture partners. The treasury has fallen behind with payments due to Sudan for the use of its export infrastructure and is paying its debt by diverting greater quantities of oil to its neighbour. In 20 months the conflict has claimed tens of thousands of lives, displaced 4.6m people, and reduced oil production by up to a third and the burden of the war effort is exerting further pressure on the treasury, which is consistently overspending its military budget.
Read the entire article in Africa Energy.