April 6, 2013 (JUBA) – The first barrels of crude oil from the oilfields in the oil-rich Unity state of South Sudan will begin to flow today through the pipelines to Port Sudan, announces the government on Friday.
- A worker walks at the power plant of an oil processing facility at an oilfield in Unity State April 22, 2012 (Reuters)
Government’s spokesman, Barnaba Marial, told the press after the cabinet meeting on Friday, chaired by the vice-president Riek Machar, that Tharjiath oilfield in Koch county of Unity state, will begin the resumption of the oil production on Saturday and pump it through the over 1,400kms long pipeline passing through the neighbouring Sudan.
The minister of Petroleum and Mining, Stephen Dhieu Dau, and other accompanying senior officials will travel to Tharjiath oilfields on Saturday to witness the pumping of the first barrels of the oil through the pipeline.
The resumption of the oil production will be the first event in the implementation of the economic deal of the cooperation agreement signed in Addis Ababa between the two regions of the former Sudan who split in July 2011.
Another oilfield, known as Unity Oilfield in Unity state in the area of Heglig/Panthou in Pariang County is also expected to resume the production in few days.
South Sudan shut down its oil production in January last year, accusing Sudan of stealing or confiscating the oil due to a disagreement over how much transit fees the new oil-producing nation should pay to its neighbour.
The situation had affected the economies of both countries that largely depended on oil revenues in order to run their machineries.
The two countries as a result of the oil shutdown had to cut back on spending in their institutions by introducing austerity budgets.
In South Sudan the government cut off a number of allowances, including the housing allowances that used to top up to the salaries resulting into the loss of nearly 50% of the overall salary of a civil servant in a country where accommodation poses a big challenge.
Despite the resumption of the flow today it may take weeks before the empty pipeline fills up with the crude oil ready for loading at Port Sudan.
Petroleum minister Dau on Friday also announced that South Sudan and Sudan will organize a coordinated celebration in three weeks on the resumption of the oil production.
South Sudan has restarted oil production, more than a year after it was halted by disputes with its neighbour Sudan.
The two countries, which formally split in 2011, agreed to resume transfers of oil across the border last month.
The resumption comes as part of efforts to avoid an all-out conflict over oil revenues and border disputes.
South Sudan has large-scale oil production, but is landlocked and reliant on Sudan’s ports for export.
South Sudan took with it nearly three-quarters of Sudan’s oil production when it declared its independence two years ago.
‘Sign of peace’
Both countries are heavily reliant on the revenues from oil exports to support government finances.
Production was halted 14 months ago over a disagreement about how much South Sudan should pay to export its oil through Sudanese pipelines.
South Sudan said the charges amounted to theft.
South Sudan’s oil minister said the decision to resume production should be taken as a sign of peace.
The two countries came close to all-out war over border disputes last year, and have since agreed to set up a buffer zone along the border.
Resumption of oil exports is seen as an important part of the peace deal.
The move is also good news for the local economy. South Sudan experienced a sharp recession after the oil was shut off.
It is not clear how long the country will take to return to its normal output of 350,000 barrels a day.
The first oil is expected to reach Sudan’s ports by the end of May, according to Sudan’s state news agency, with output expected to reach 150,000 to 200,000 barrels a day. bbc