Dar Petroleum Operating Company will resume oil production in South Sudan following the lifting of a force majeure on the pipeline route through Sudan. This decision is attributed to improved security conditions and aims to enhance South Sudan’s economy, which relies heavily on oil revenues. The operations are planned to restart on January 8, 2025, with the collaboration of international partners.
Dar Petroleum Operating Company (DPOC), the principal oil operator in South Sudan, is set to restart its oil production following the lifting of a force majeure declaration by Sudan concerning the pipeline route through its territory. This announcement was made by South Sudan’s Minister of Petroleum, Puot Kang Chol. The force majeure had been in place for approximately ten months, prompted by a significant pipeline rupture and security issues stemming from ongoing conflicts in Sudan.
The lifting of force majeure was initiated earlier this month due to enhanced security measures and arrangements, which have since stabilized the situation. The conflict in Sudan escalated in April 2023, leading to considerable disruptions affecting South Sudan’s oil export network. The resumption of DPOC operations, particularly in Blocks 3 and 7, is seen as pivotal for bolstering South Sudan’s economy, which relies heavily on oil revenues for its state budget.
Minister Chol also confirmed that production activities would recommence on January 8, 2025, with the collaboration of international partners such as CNPC, SINOPEC, and SSTO. The minister expressed that this revival of operations would contribute positively to the economic stability of South Sudan, which has witnessed a dramatic decline in oil exports due to the recent conflict-induced challenges. Therefore, DPOC and Bashier Pipeline Company have been directed to begin operations immediately, marking a critical step forward for the country’s oil sector.
South Sudan heavily relies on oil exports for economic stability, with approximately 90% of its state revenues generated from this sector. The country’s oil is transported through a single pipeline that runs through Sudan to Port Sudan on the Red Sea. In March 2024, a force majeure was declared after a major pipeline rupture exacerbated by violence in Sudan impeded oil flows, significantly affecting South Sudan’s economy. The subsequent lifting of this force majeure indicates improvements in the security situation, thus enabling the resumption of vital oil production operations.
The decision to restart oil production by Dar Petroleum Operating Company marks a crucial development for South Sudan, potentially revitalizing its economy after a period of severe disruption due to conflicts. With secured agreements in place between South Sudan and Sudan, the resumption of operations could herald an era of renewed economic activity, although the region remains under scrutiny for any further disturbances that may impact these plans.
Original Source: oilprice.com
