National, News

Investor fatigue hits South Sudan’s oil production

By Charles K Mark

South Sudan’s oil production has drastically reduced due to investor anxiety.

Managing director of Nile Petroleum Corporation, (Nilepet) Engineer, Mr. Bernard Amour Makeny disclosed on Sunday, upon his return from China.

The Managing Director attributed the decline in oil production, especially in Blocks 3 and 7, to lack of confidence in terms of security of the investment.

Eng. Makeny, who had gone to China for a global agenda mission, said he shared confirmation and recommitment of the country in terms of the safety of their staff and guarantee of the investments.

“So we are able to exchange views constructively, honestly, and truthfully, and of course, their concerns were raised, which I’ll share with the leadership of this country to ensure that we give the confidence necessary for us to improve production in blocks three (3) and seven (7),” Eng. Makeny said.

He reiterated the need for the country to increase production in the mentioned blocks.

“There is a need for us to do that. In any oil and gas business, when the price of oil is good, you have to produce more,” the Nilepet M.D. emphasized.

The major oil company in South Sudan has been and is still the Chinese National Petroleum Cooperation (CNPC), where the MD had exclusive time with its leadership during his visit to China.

The exploration and production sharing agreement MoU South Sudan signed with China’s CNPC will expire in 2027.

And the country’s national petroleum corporation, Nilepet, is likely to take over, but the MD said it is a long process to go through.

“We have to build the right capacity; we have to mobilize the right resources. We must have the necessary capital that is required for us to intensively operate,” he said.

For now, the cooperation believes it does not have the capacity that investors such as CNPC, PETRONAS, and other oil companies have to be able to explore new wells or increase oil production in the existing oil blocks.

“As I said traditionally in the past, blocks three (3) and seven (7) can produce up to 260,000 barrels per day. Today it is only producing 104,000 bpd,” Mr. Makeny revealed.

The MD said there is a need not only to increase production or sustain production but also to drill more new wells.

“But the current status of the partners is that nobody wants to put in more money because everybody is not too sure about 2027,” Makeny noted.

The Nilepet boss said the country still faces challenges in transporting readily refined oil from the Unity Oil Refinery due to a poor road network.

He added that if the refinery is fully operational at capacity, it will produce up to 10,000 barrels per day.

“We also recently signed an MoU with a company in the UAE called SPECT to set up a brand-new refinery in blocks Three and Five A, which is a block that can produce up to 70 to 80,000 barrels per day,” Eng. Makeny further disclosed.

Comments are closed.