Search results

Parliament has passed a bill that aims to make the management of oil revenues more transparent, more than two years after the first oil sales from the newly independent country in July 2011. The Oil Revenue Management Bill, which was approved by parliament in July, must now be approved by the president in order to become law. The bill establishes a framework for how the government can use its oil revenues, which in H2 2011 accounted for 98% of government spending. Under the bill, a single Petroleum Revenue Account will be created to receive all oil sector revenues.

An investigation committee appointed by President Salva Kiir has recommended criminal proceedings against former cabinet affairs minister Deng Alor Kuol for an alleged ‘un-procedural’ transfer of $8m to Kenyan-based company Daffy Investment Group. Alor Kuol was suspended from the government in June, along with former finance minister Kosti Manibe Ngai. Manibe Ngai has since been cleared of any criminal responsibility.

On 23 July, South Sudan published figures for oil sales that suggest that until recent weeks, output had been consistently rising. According to the government, its share of marketed oil was 1m barrels in June, 2.2m barrels in July and a projected 3.2m barrels in August. Assuming an average government share in sales of 60%, that puts total sales at an average of 55,000 b/d in June, 118,000 b/d in July and 172,000 b/d in August.

The government published oil sales figures on 23 July showing that its share of marketed oil was 1m barrels in June, 2.2m barrels in July and a projected 3.2m barrels in August. Assuming an average government share in sales of 60%, that puts total sales at an average of about 55,000 b/d in June, 118,000 b/d in July and 172,000 b/d in August. The pipeline shutdown will not affect August oil sales because the linefill will be sufficient to meet commitments.

On 27 July, Sudan’s oil ministry informed oil companies that it had put back the scheduled date for shutting down the oil export pipelines from 7 August to 22 August. The decision followed a request from African Union (AU) mediator Thabo Mbeki and the Chinese government to allow more time for negotiations between Juba and Khartoum. South Sudan only resumed oil production in April after a 15-month closure of the pipeline network, and the extension is the latest in a series of twists and turns that have made the outcome of negotiations difficult to read.

PV Tech South Sudan Ltd, a subsidiary of California-based PV Tech Inc, has signed a power purchase agreement with Central Equatoria State for a 20MW hybrid power plant. PV Tech chief executive Fred Anguka told African Energy the plant would be developed on an independent power producer basis and was expected to begin operating in 2014. The facility will be fuelled 50:50 by diesel and solar power, with the potential for biomass to be used in the combustion component. Anguka said PV Tech had enjoyed “close collaboration with the state and central government to ensure that the project proceeds as planned” and that the state “offers a conducive business environment”.

President Salva Kiir’s dramatic sacking of his cabinet removes two key critics of the South Sudan leader who were also leading figures in negotiations with the north over oil exports, raising fears that talks could be affected as another deadline looms. Kiir dismissed his entire administration on 23 July in a sudden move that he claimed was driven by the need to clamp down on corruption and reduce the number of cabinet posts. Vice president Riek Machar was sacked, and Pagan Amum, secretary-general of the ruling Sudan People’s Liberation Movement (SPLM), was suspended. Both have been critical of Kiir, provoking suggestions that the reshuffle was politically motivated.

In the latest twist in the difficult relationship between Sudan and South Sudan, Khartoum has vowed to close its pipeline infrastructure to South Sudanese oil, just three months after an agreement was reached to resume exports after a 15-month hiatus. But there is still scope for an agreement before the shutdown is implemented, sources in Juba and Khartoum tell African Energy.

Ethiopian Electric Power Corporation (EEPCo) has signed a $1.4bn agreement with China Electric Power Equipment and Technology Company (CET), part of the State Grid Corporation of China, to build a 619km double-circuit 500kV AC transmission line to connect the 6,000MW Grand Renaissance dam to the grid. The project is expected to be implemented in stages between 2014 and 2016. The work will also include construction of a 98km double-circuit AC transmission line and two new 500kV substations as well as expanding three 400kV substations.

South Sudan energy minister Stephen Dhieu Dau was due to hold an official ceremony on 27 April to mark the first oil flows from Unity State into a pipeline to Sudan operated by Greater Pioneer Operating Company (GPOC). The flow of oil from Upper Nile State into the second export pipeline to Sudan, operated by Dar Petroleum Operating Company (DPOC), was due to begin on 30 April. Though the Ministry of Oil in Khartoum reported the arrival of a small test shipment from the South in early April, the full-scale resumption of both pipelines has been delayed and no new date has been set for either, according to sources in Juba.

The United States’ Overseas Private Investment Corporation (Opic) has signed an investment incentive agreement with the government of South Sudan supporting US private sector investment. The first investment Opic will support in South Sudan is the construction and operation of a 150-room hotel in Juba by Delaware-based Aquila Investments and Jordan’s Taher Investments. The agreement was signed at a South Sudan Investment Forum in Washington on 17 April, organised by the US Agency for International Development.

The resumption of oil production in South Sudan has given new impetus to the country’s refining plans. Two facilities are planned for construction this year: a 5,000 b/d plant at Bentiu in Unity State, and a 10,000 b/d plant at Thangrial, in Melut county in Upper Nile State. South Sudan has no refining capacity, having relied in the past on imports of refined products from neighbouring countries such as Sudan and Uganda. The Bentiu plant is being developed by Russia’s Safinat Caspian Oil Refining Company, which signed a memorandum of understanding in December 2012 with energy minister, Stephen Dhieu Dau and Unity state governor Taban Deng Gai to build the refinery.

After 15 months of impasse, Sudan’s Ministry of Oil has announced that initial quantities of crude from South Sudan have reached its territory in line with a co-operation agreement signed on 12 March. Under-secretary at the Ministry of Oil Awad Abdul Fatah told AFP that “we’re really in a hurry to do things quickly” and “we’d like for the money to start flowing as soon as possible”. South Sudan suspended oil production in January 2012 in protest at unreasonable transit fees charged on its exports on the way to Port Sudan by the government in Khartoum. The blockage has cost both countries heavily.

After more than a year of blockage, the detailed provisions in the latest deal reached by negotiators from Sudan and South Sudan mean oil could start to flow again within weeks. The deal was reached in the early hours of 12 March after almost a week of talks in the Ethiopian capital, Addis Ababa. An implementation schedule has been agreed by the two sides that demands a resumption in oil production be mandated by the two governments by 24 March. South Sudan halted oil exports via Sudan in January 2012, after the Khartoum government began to confiscate South Sudanese oil as payment for what it claimed were unpaid transit fees.

As the standoff with Khartoum continues, South Sudan is looking at alternatives for its oil. Three refinery projects are in discussion and an export pipeline to Kenya seems increasingly likely, writes Richard Nield