South Sudan resumes output in key oil area after five-year halt

JUBA (Bloomberg) -- South Sudan restarted crude production in a key oil region almost five years after facilities were shuttered by civil war.

The resumption of output in the so-called Unity fields marks the start of efforts to rebuild the oil-dependent economy, which has sub-Saharan Africa’s third-biggest reserves. The East African nation’s warring parties signed a peace deal this month to end fighting that’s claimed tens of thousands of lives.

Output has resumed at Toma South, one of several fields in the region formerly known as Unity state, Petroleum Minister Ezekiel Lul Gatkuoth told reporters Saturday during a field visit to the site in northern South Sudan. The ministry said earlier this month that output will resume at the El Mar, El Toor, Manga and Unity fields later this month.

“We have now resumed production officially in Toma South,” Gatkuoth said. “We will be producing 45,000 bpd.”

Production at the fields ceased in December 2013, when conflict erupted after a dispute between President Salva Kiir and his former deputy, Riek Machar. The ensuing chaos resulted in Africa’s biggest refugee crisis, displacing millions of people, and resulted in the economy contracting for three of the past four years, International Monetary Fund data shows.

South Sudan was producing about 350,000 bpd in 2011 when it seceded from Sudan. Disputes with Sudan over transit fees and then the outbreak of civil war cut output to about 135,000 bpd in April.

Neighboring Sudan helped repair the damaged oil fields, and will rehabilitate roads as well as provide electricity to help transport the crude to a port for export from Sudan’s Red Sea coast. Sudan Oil Minister Azhari Abdul Gadir said during a joint briefing at Toma South his nation will continue to help its neighbor to reach pre-independence production of about 500,000 bpd.

Crude from Toma South is being shipped to Heglig, situated across the border in Sudan about 28 km (17 mi) from the Unity fields. Repairs to a pipeline and other equipment at Heglig, needed after a 2012 war between the two countries, are complete, according to Fadoul Abdallah Ahmed, head of the facility.

“The internal networks of the pipelines are complete and we are ready for the flow from Toma South,” he said. “After a few days, we will begin exporting to the export terminals.”