South Sudan Oiling Up for Self-Reliance
By <
http://www.ipsnews.net/author/charlton-doki/> Charlton Doki
JUBA, Nov 29 2012 (IPS) - As South Sudan continues negotiations with Sudan
regarding the resumption of oil production and transit, the South Sudanese
government says that it is developing its own industry and will start
producing fuel for domestic consumption within the next eight months in
order to avoid continued reliance on its neighbour.
South Sudan's Petroleum and Mining Minister Stephen Dhieu Dau told IPS that
as oil was due to start flowing again, one of the government's priorities
was to establish the nation's infrastructure in order to process the
commodity itself.
"Our aim is to ensure that some of the oil can be processed in the country
to meet domestic needs and end the frequent shortages of diesel and petrol
in our country," Dau said.
South Sudan shut down its production of oil in January after a
<
http://www.ipsnews.net/2011/10/south-sudan-oil-conflict-threatens-to-break-
out/> dispute with neighbouring Sudan over oil transit fees. Both countries
agreed to resume oil production and trade on Sep. 27 after former South
African President Thabo Mbeki led the African Union's
<
http://www.ipsnews.net/2012/09/international-community-overselling-sudan-so
uth-sudan-pact/> mediation efforts in attempting to defuse a range of
disagreements that spiked in January, which almost led to
<
http://www.ipsnews.net/2012/10/abyei-region-still-a-stumbling-block-between
-south-sudan-sudan/> full-blown war in April.
Oil sales contributed 98 percent of South Sudan's revenue. But despite
taking with it
<
http://www.ipsnews.net/2011/07/south-sudan-equitable-oil-deal-needed-for-pe
ace/> 75 percent of Sudan's oil when it gained independence from the rest of
the country in 2011, South Sudan currently relies on Sudanese refineries and
pipelines to process and transport its oil to the international market.
South Sudan's President Salva Kiir said on Monday Nov. 26 at a meeting of
state governors that oil production had not resumed this month as originally
expected because of demands by Sudan that the country disarm the rebel Sudan
People's Liberation Movement North.
He did add that the issue would be resolved soon as he had spoken with
Sudan's President Omar al Bashir on Sunday Nov. 25 and they agreed that
officials from the two countries would soon meet to discuss the issue.
But in a bid to reduce reliance on Sudan, on Nov. 20 Kiir launched the
construction of an oil refinery in Melut, an oil-producing area in South
Sudan's Upper Nile state. A second refinery is being built in Tharjath,
another oil-producing area located in the country's Unity state. Both
refineries are expected to have the capacity to refine 10,000 barrels per
day.
Dau said the oil refineries were expected to be operational by July 2013,
when the government expects to start producing fuel for domestic
consumption.
"These refineries will create employment opportunities for our youth, which
is one of the things we want so that people benefit from our natural
resources," Dau added.
Edmond Yakani of the local NGO Community Empowerment for Progress
Organisation said that in addition to refineries, the landlocked country
needed to build its own pipeline to the Kenyan Port of Lamu.
"I don't think relations between the two countries will get any better and
therefore South Sudan should endeavour to build its own pipeline," Yakani
told IPS.
Finance Minister Kosti Manibe Ngai said three months ago that work on the
pipeline would start in June next year at an estimated cost of three billion
dollars.
"The government also needs to build reservoirs so that if there are any
problems with Sudan we can still have fuel to keep the country going,"
Yakani added.
Despite having four billion barrels of proven oil reserves, the largest in
East Africa, South Sudan still has to surmount daunting capacity issues.
The acting director general in the Energy and Mining Ministry Simon Chol
Martin told IPS that the government was concerned about the small number of
South Sudanese being employed by oil operating companies.
The Chinese-Malaysian consortium Dar Petroleum is currently South Sudan's
largest oil operator and Chinese and Malaysian nationals usually occupy
technical and senior positions in the oil industry here. Prior to
independence Sudanese nationals filled these positions, but many left the
country after independence.
Paul Adong, chief executive of South Sudan's national oil company, Nile
Petroleum Corporation (NilePet), told IPS that the government's priority was
to ensure South Sudanese were recruited into the sector and that the
necessary capacity building was done "to ensure that we increase the number
of South Sudanese who can take charge of the sector in the long run."
In order to improve the capacity of local staff, the government is working
to reach an agreement with Norway's Petrad to provide training, he said.
"There is only one way of building an exploration and production company and
that's through hands-on experience. It's a knowledge-intensive process and
you need not only the right degrees but practical experience in
engineering," Adong said. He added that once Juba resumed oil production,
NilePet would build South Sudanese expertise in the industry.
Adong said with continuous capacity building he hoped NilePet would be
successful in five years time. "I hope by then we will have the technical
know-how. We would say we are successful if NilePet can operate a field
entirely on its own," he said.
Meanwhile, local communities and activists are urging oil companies to
protect the environment in oil-producing areas and have called for reports
of pollution to be investigated.
John Lam Obur, a Juba University student who hails from Melut, in Upper Nile
state, said that the activities of oil companies had led to environmental
pollution in his home area.
"Cattle are dying when they drink rain water near the oil fields, people are
suffering from diseases never seen before, and the whole air smells bad
because of the waste material from the oil fields," he told IPS.
But Adong said oil companies were aware of the concerns and were working to
address them, adding that they did not want to repeat the mistakes made by
other oil companies in parts of Africa such as in the Niger Delta in
Nigeria.
"We would rather give up the dollars and keep our community safe and our
environment safe," he said.
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Received on Thu Nov 29 2012 - 19:31:17 EST
