A man examines leaking oil pipeline at a pumping station built next to his village on land once used for agriculture in Plough, South Sudan, on Jan 20, 2010-AFP Photo.
South Sudan’s Minister of Petroleum, Puot Kang Chuol, on Tuesday, announced the government’s intention to resume oil production effective Wednesday, 8 January 2025, targeting 90,000 barrels of crude oil per day.
This announcement came one day after Sudan’s government declared the lifting of the force majeure to resuscitate the oil sector to rescue the dire economic situation in neighboring South Sudan.
“There were several concerns about the technical readiness and security assurance, but those concerns were addressed,” Kang said; “With the force majeure officially lifted by the government of Sudan and based on that the Ministry of Petroleum and partners would like to declare that the kickoff date for oil resumption in 8 January 2025.”
Juba and Khartoum are both clenched on interest in the field of oil and gas. Sudan owns the pipeline where the landlocked South Sudan depends on Sudan to transport its crude oil to the international market via Port Sudan and using Sudan’s oil pipelines.
Minister Kang’s announcement brought relief to the people of South Sudan who have lost purchasing power, because of the weakening of the South Sudan Pound against the Greenback.
Civil servants, organized forces, and soldiers have gone for more than a year without salaries, stirring the fear of civil disobedience and potential chaos in the world’s youngest nation.
The widespread corruption in the oil sector and negligence in the disposal of hazardous chemicals in the oil-producing areas are among the obvious challenges that the citizens face.
Oil accounts for 90 percent of South Sudan’s revenue. A significant drop in oil production derailed economic growth, despite better harvests before the force majeure was declared by Sudan’s government in March 2024.
Food insecurity and extreme poverty remain high because of high inflation, climate, and external shocks, declining official development assistance, structurally weak governance, inadequate service delivery, and localized conflict, according to the World Bank.
The conflict in Sudan poses acute risks to macroeconomic stability, exacerbating fiscal pressures and pressing humanitarian needs. A loss of momentum in the political transition could amplify these risks
More than a decade after independence, South Sudan’s development prospects remain constrained by fragility, heavy reliance on oil revenue and external financing, and limited state capacity to deliver public services.
Acute humanitarian and macroeconomic challenges have been further compounded by the conflict in neighboring Sudan that has disrupted the flow of oil through pipelines in Sudan.
Fiscal capacity to counter the large decline in oil production or global oil and food price shocks remains highly constrained by severe challenges in the governance of oil sector revenues and weak fiscal discipline.
