Dar Petroleum Operating Company will restart oil production in South Sudan following the lifting of force majeure by Sudan, which had been in effect for ten months due to security issues. Improved conditions have allowed for the resumption of operations, aiming to bolster South Sudan’s economy heavily dependent on oil revenues.
The Dar Petroleum Operating Company (DPOC), South Sudan’s principal oil operator, will resume its oil production operations beginning Wednesday. This development follows the lifting of the force majeure by Sudan on the pipeline that facilitates the transportation of oil from South Sudan to Port Sudan on the Red Sea, as confirmed by Puot Kang Chol, the South Sudanese Minister of Petroleum. The force majeure, which had been in effect for ten months due to security issues, was lifted following the establishment of new security measures and improved safety conditions in Sudan.
In March 2024, Sudan initially declared a force majeure on the export of crude oil from South Sudan due to a significant pipeline rupture in a region plagued by military conflicts. The recent resurgence of violence began in April 2023 between the Rapid Support Forces (RSF) and the Sudanese army in Khartoum. With the improved security framework now in place, DPOC is set to resume operations in Blocks 3 and 7, marking a pivotal moment for the South Sudanese economy as it heavily relies on oil for the majority of its revenue.
Following the lifting of the force majeure, the South Sudanese Minister of Petroleum communicated via X that the resumption of operations would be with the backing of international partners, including CNPC, SINOPEC, and SSTO. He emphasized the economic significance of this restart for South Sudan, stating, “This restart will have a significant positive impact on South Sudan’s economy.” He further instructed DPOC and the Bashier Pipeline Company (BAPCO) to commence operations immediately, underscoring the urgency and importance of restoring oil exports which have drastically fallen due to the conflict in Sudan.
South Sudan, a landlocked nation, relies almost exclusively on oil exports for its economic sustenance, with oil accounting for 90% of the government’s revenue. However, its access to international markets relies on pipeline infrastructure that runs through neighboring Sudan. A severe security crisis in Sudan, particularly involving military conflicts and the presence of paramilitary forces, led to the suspension of these flows, severely impacting South Sudan’s federal budget. The lifting of the force majeure indicates a potential stabilization in security and operational conditions, enabling a much-needed recovery in oil exports.
The resumption of oil production by DPOC signifies a crucial turning point for South Sudan, coming after a prolonged period of disruption caused by conflict in Sudan. With force majeure lifted and new security measures in place, South Sudan’s oil sector can restart operations, potentially revitalizing its economy. This announcement reflects the collaborative efforts with international partners to enhance the security and viability of oil exports, thereby addressing the economic challenges posed by the recent conflicts.
Original Source: oilprice.com
