Tuesday, October 17, 2017
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South Sudan targets oilfield security

South Sudan to up oilfield securitySouth Sudan is tackling the chief obstacle to new investment in its oil sector - security - as it aims to restore production to levels recorded before war broke out in 2013, the oil minister said.

“Security is now under control and those investing will be provided with security,” Minister Ezekiel Lol Gatkuoth said in an interview in Juba.

High hopes for the fledgling oil sector of the world’s youngest nation evaporated when conflict erupted, forcing oil firms to shut and cut production to 130,000 barrels per day.


The country has sub-Saharan Africa’s third-largest reserves and is the only mature oil producer in East Africa. It is embroiled in a war that has forced a third of its population to flee creating Africa’s biggest refugee crisis since the Rwandan genocide.

All but one oil asset, the Melut Basin project, remain shut due to conflict.

A security force of soldiers, national security officers and police was deployed this year to the Melut Basin. It is operated by a consortium including China National Petroleum Co and Malaysia’s state-run oil and gas firm Petronas.

The minister said this deployment showed government’s commitment to ensuring oil companies have the security critical to securing investments badly needed to boost production and government revenues.

“Resumption of production ... back to where it used to be, increase in production and exploration in certain areas, these are our priorities,” he said.

Giving a more modest target than other officials have this year, he said production would reach 150,000 bpd by the end of 2017 after output increased in Melut Basin.

“Next year it will reach 200,000 bpd,” he added. Output was about 245,000 bpd before the war.

Juba will host executives from French oil major Total and nearly a dozen other oil companies this week for a conference to bring new investment.

That could be a hard sell to firms such as ExxonMobil, which the minister said shunned his offer to take a stake in a block in what government says is its biggest untapped oil deposit.

The United Nations says South Sudanese soldiers have committed violations against civilians that may amount to war crimes, charges government says are baseless.

Gun battles in Juba in July 2016 ended a fragile peace process and the most powerful rebel figure - the former vice president - is under house arrest in South Africa.

As recently as March rebels kidnapped four oil workers including a Pakistani in a bid to force the Chinese and Malaysian consortium to leave the country.

THIRD-PARTY SECURITY

Government is talking to private security firms preparing options for “third-party security” for existing oil projects, the minister said.

He said government had no objection to private firms assisting with security in the oilfields, for example by securing “base camps” inside installations.

This would complement government forces deployed to other oil projects once production there is restored.

“The companies have the right to bring anybody that will give them peace of mind,” he said, adding operating companies would likely directly contract those firms once production resumed.

Other firms that had produced oil before the conflict include India’s ONGC Videsh. In March government granted a license to Nigerian firm Oranto to explore and it recently approved the company’s seismic plans, the minister said.

 
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