Sudan Strikes Deal With Protesters To Allow Oil Exports

The Sudanese government has reached an agreement with protesters to lift blockades off Red Sea ports, including an export hub for South Sudan oil.

Reuters reports that local tribes have been protesting against bad economic conditions in eastern Sudan and have blocked roads and ports, including one that ships crude oil from South Sudan to international markets.

The agreement between the government and the protesters staved off an imminent disaster: the petroleum ministry warned that the storage capacity of Sudan's oil export terminal would fill up within ten days. If that had happened, South Sudan oilfields would have had to stop producing.

Landlocked South Sudan is home to most of the oil reserves of the old united Sudan, and while most of these reserves have yet to be tapped, the country is producing well above 100,000 bpd, hitting a high of 185,000 bpd earlier this year, right before its first-ever licensing round.

Currently, South Sudan has five producing blocks, operated by China National Petroleum Corporation (CNPC), India's Oil and Natural Gas Corporation, and Malaysia's Petronas.

"The oil licensing round aims to attract interest from a diverse group of foreign investors to a region that is already home to oil and gas majors from China and Malaysia," said the country's Ministry of Petroleum at the time.

South Sudan broke from Sudan in 2011, taking with it around 350,000 bpd in oil production. But then civil war broke out in South Sudan in 2013, which further complicated oil production.

In 2018, the warring factions in South Sudan signed the so-called Khartoum Declaration of Agreement, in which the parties to the South Sudan conflict declared a permanent ceasefire, and the governments of Sudan and South Sudan explored ways to rehabilitate the oil sector in South Sudan.  

According to the South Sudan Petroleum Ministry, as much as 90 percent of the country's oil wealth remains unexplored.

By Charles Kennedy for Oilprice.com

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