By Okech Francis
South Sudan is planning more exploration and refining fuel to maximize profits from its crude reserves and use it to spur the development of other sectors, the Managing Director of the country’s oil corporation, Nile Petroleum Corporation, Bol Ring Mourwel said.
The African country is facing a chaotic economic situation after fighting slashed its crude production which accounted for 98 percent of revenue, and worsened by global price drops.
Plans to refine oil and ensure supply of the local market with fuel in adequate has also been stepped up, Mourwel said in an interview on June 12.
Oil companies operating the largest oil blocks 3 and 7, in the northern Upper Nile region “are no longer willing to invest more since the blocks are close to the end of their life span” and “no exploration there is going on,” Mourwel said.
“Because of the partners who are reluctant, they don’t want to put in some money, we believe that these blocks, since 20 years now, the progress of going on with it will be actually in a position to experiencing problems later in the future,” he said.
“There is very high fees in Sudan and also some of our fields are aging and we cannot be able to maintain production if we do not have new discoveries,” he said.
“Other blocks are still for exploration and we have to get credible companies that can come and invest.”
Production in Block 5A in Tharjath in Unity State will also be increased from 5,000 bpd to between 40,000 and 50,000 bpd to provide locally produced fuel cheaply in the country, Mourwel said.
Plans are also soon starting for a feasibility study for a refinery in Paloch to cater for markets in the neighboring countries of Ethiopia and Sudan
“We must refine part of the products so that we can have the consumption locally and we would avoid selling the crude oil through Sudan, bringing the hard currency and again going back to Mombasa and bringing the fuel,” Mourwel said.
“So the best way is to refine some of the crude and be able to have availability of the fuel products and we will be able to go for the industries, which mean we change the scenario to go for having infrastructure like manufacturing for steel, cement and power plants,” he said.
Crude to Enhance Peace Potentials
Proper use of the crude reserves will ensure a sustainable peace in South Sudan, Mourwel said.
“In actual fact, when you have oil in your country and you do not utilize well, you will live with chaos, you live with difficulties and at the end of the day, few people will be exploiting the situation and will be benefiting more than others,” he said.
“So the best thing, we must use the oil production in order to bring other sectors up,” he said.
“The budget is 98 percent from oil and we cannot continue for years because this is going to be depleted and if we are going to deplete it, then we have to get other alternative sectors,” he said.
The best thing now for South Sudan to benefit is like what has been decided by the president, to use the oil money for infrastructure. South Sudan must utilize its money from oil to develop infrastructure as a priority and also use it to develop agriculture.”
According to Mourwel, the war has created hiccups, shunning away potential partners and investors who “are not able to come here because the stability of this country is not in place,” Mourwel said.
“The implementation of the revitalized peace agreement is not to that extent, so we still require more than 5 years’ time until we put our system in place, the banking system, the finance and everything and this is where we can now invest,” he said.
“If we do not have changes to refine, and send it all as crude, we will be stuck one day and we will not be able to pay fees through Sudan. This is very risky.”