The project, which expected to reach production in about six years, includes the construction of a 60,000 barrel per day oil refinery in Pagak.
Wednesday 22, May 2019
(Bloomberg) – South Sudan’s oil minister said that South Africa’s Strategic Fuel Fund is welcome to bring in partners to help it execute a $1 billion agreement to drill for oil and build a refinery and pipeline in South Sudan.
Under the agreement, signed between the two governments on 6 May, the Strategic Fuel Fund holds 90 per cent of the project in B2 block, while South Sudan’s Nile Petroleum Corporation, said Ezekiel Gatkuoth, the South Sudan Oil Minister.
Additionally, the South Sudanese oil minister said that his government has the right to approve any partners and that a transaction would be subject to capital gains tax.
The partnership should benefit South Sudan by boosting production in a nation where output is half of what it was before a civil war while securing energy supplies for South Africa which imports crude for its refineries as it has little oil production of its own.
In addition to bringing new partners into its oil fields, South Sudan is trying to diversify export routes for its oil.
Gatkuoth said that currently South Sudan is exporting oil through Sudan, the country from which it seceded acrimoniously in 2011, at a cost of $24 a barrel but it is considering paying Uganda a fee to transport crude south to a port in Tanzania when new pipelines are built.
Similarly, exports through Ethiopia is also another option.
The B2 block was once part of an area held by Total until 1985 that was the size of Pennsylvania.