South Sudan will restart oil production on January 8, 2025, after Sudan lifted a ten-month force majeure on the pipeline route, allowing transportation through Sudan to Port Sudan. This decision follows improved security arrangements in Sudan, which are critical as South Sudan’s economy heavily relies on oil exports. The Dar Petroleum Operating Company is backed by international partners for this operation restart.
The Dar Petroleum Operating Company (DPOC), South Sudan’s leading oil operator, is set to resume oil production following the lifting of force majeure on pipeline operations by Sudan. This decision, announced by South Sudan’s Minister of Petroleum, Puot Kang Chol, will allow the transportation of oil from South Sudan through Sudan to Port Sudan on the Red Sea, effective January 8, 2025. The force majeure had been in place for ten months due to security concerns stemming from conflict within Sudan, exacerbated by a military coup and subsequent fighting between armed factions. With new security arrangements in Sudan, DPOC is able to restart its operations with the backing of international partners such as CNPC and SINOPEC. This reopening is expected to significantly benefit South Sudan’s economy, which has suffered from reduced oil exports, essential for funding approximately 90% of state revenue.
South Sudan has been facing economic hardships primarily due to the disruption of oil exports, a crucial revenue source, caused by ongoing conflicts in Sudan. In March 2024, a pipeline rupture and subsequent military activities led to Sudan declaring force majeure on oil exports from South Sudan. The lifting of this force majeure is linked to improved security conditions and arrangements within Sudan, providing a pathway for the resumption of South Sudan’s oil flows which had been severely impacted over the past year.
In summary, the resumption of operations by Dar Petroleum Operating Company represents a crucial turning point for South Sudan’s economy, directly linked to the recovery of its oil export capacity. This development highlights the importance of security stability in neighboring Sudan for facilitating economic growth in South Sudan, which relies heavily on oil revenues. The support from international partners ensures that production can effectively recommence, paving the way for economic recovery and enhanced revenue generation for the country.
Original Source: oilprice.com
