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South Sudan to pump at 70 pct when oil restarts: Finance min

Crude production will take up to a year to reach full capacity, with IMF loans needed to fill the gap, says official

Reuters, Wednesday 19 Sep 2012
Views: 1060
Views: 1060

South Sudan will only be able to pump oil at about 70 per cent of its former capacity when it finally resumes crude production after shutting down all its wells nearly eight months ago, the finance minister said on Tuesday.

The newly-independent nation also plans to seek loans from the International Monetary Fund (IMF) as it tries to make up for the loss of oil, which accounted for about 98 per cent of state revenues, Finance Minister Kosti Manibe told reporters in Juba.
Landlocked South Sudan seceded from Sudan over a year ago, taking about 350,000 barrels per day of oil output - around three-quarters of the united country's total - but closed it off in January in a dispute with Khartoum over export fees.
The two reached an interim deal last month that could open the way to resuming exports, raising hopes output could soon restart and give a boost to the two ailing economies.
But even after a final deal, Manibe said it could take three to six months for crude to flow into the eastern pipeline from Upper Nile state and nine to 12 months in the western pipeline from Unity state, which was damaged during border clashes.
The oil would then take as much as two months to travel from the fields to the Red Sea terminal at Port Sudan, he said.
"When you resume the pumping of oil, it's not possible to resume at 100 percent operation rate. The projection so far is that it will begin at about 70 percent is the best they can do," he said.
"Even the revenues that we will collect from oil sales will be lower than what we were collecting in the past."
He said South Sudan expected to collect another $540 million from an oil cargo which was sold in January but was still being held in offshore accounts after a deal was signed.
If the two sides fail to reach a deal it could take as much as two years for oil to flow via a planned alternative pipeline, Manibe said.
South Sudanese officials have been scrambling to make up for the sudden loss of oil income, including through domestic and foreign loans.
Manibe said they would also seek funds from the IMF.
"As a member we're qualified now to apply for a loan from the IMF and we do intend to do it," he said. "We're seeking loans from very many quarters including the IMF."
The country has a current quota of $200 million which they were working to have doubled, Manibe said.
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