The Republic of South Sudan is forging ahead with plans for a new licensing round to be held early next year. The East African country was supposed to hold its first licensing round in the first quarter of 2020 however due to the Coronavirus pandemic these plans have been delayed to 2021.
Undersecretary for the Ministry of Petroleum, Hon. Engineer Awow Daniel Chuang says, “In the past, the civil war meant that we could not access some of the oil-rich areas. We are confining ourselves to the current exploration areas because when investing companies make a major discovery, they will concentrate on a localised area. Major oil discoveries have been made in the past in South Sudan, and there is now an opportunity for more expansion in the oil sector. That is why we are planning the new licensing round, as well as a major geological survey, in order to quantify the country’s resources.”
Currently, South Sudan can produce oil in three areas but are only producing in two areas. According to the Undersecretary, the country’s total production is currently at between 170 000 and 172 000 barrels per day (bpd) which is not far too off from their projected target of 190 000 bpd.
Chuang says, “Unfortunately, production has dropped a bit because to the Covid-19 pandemic, which has, mainly affected logistics. No planes are flying, workers are not being rotated and materials are not being delivered on time, which all affect production levels.”
The oil and gas bidding round, which comprises 14 oil blocks in the northern oil fields will help accelerate economic recovery and spur the appetite of international oil investors and services companies.
Despite the setback, the South Sudan economy is on the road to recovery, so much so that the IMF and World Bank had expected South Sudan to be the fastest-growing country on the African continent in 2020, growing by 8.2%, but because of the pandemic, this figure is now reduced. According to the IMF’s Regional Economic Outlook Report on Sub-Saharan Africa (April 2020), the real GDP growth for South Sudan is now 4.9% for the year. This figure is considerably more impressive when one considers that between 2010-2016 the GDP was -7.4. Just a few years later in 2019, the GDP bounced to an impressive 11.3%.
Despite the current setback to their plans, the economy is showing steady growth.
The Undersecretary says, “We have ambitious plans. We were aiming to achieve our target of around 250 000 bpd by the end of next year, but current circumstances have made it difficult, which means we are now looking at the middle of next year. Within a very short period, we should be able to achieve 220 000 bpd and then 250 000 bpd. But this will not be achieved this year. We have the potential to reach 300 000 bpd by around 2022.”