Page 6 - Downstream Monitor - MEA Week 34

DMEA Commentary DMEA
South Sudan reports two new oil discoveries
CNPC’s large new oil eld should help Juba bring production back up, while the smaller nd could establish a path towards diversi cation
afriCa
What:
Both of these nds will contribute to South Sudan’s efforts to revive the oil sector.
Why:
Juba hopes that additional discoveries will be made outside CNPC’s area of greatest in uence.
What next:
New investors might throw their weight behind alternate pipeline plans.
SOUTH Sudan has made more progress towards the revitalisation of its oil industry over the last week, with the announcement of two new discoveries.
Oil Minister Awow Daniel Chuang broke the news of the larger nd on August 20, telling Platts in an interview that Dar Petroleum Oper- ating Co. (DPOC) had encountered crude oil in an exploration well drilled at Block 3, a site near the Adar eld. Preliminary estimates indicate that the block contains more than 300mn barrels in recoverable reserves, he said. e gure may rise, since DPOC has yet to nish reviewing two other wells, he added.
Chuang was speaking just one day a er he told reporters about another discovery. Speaking at a press conference in Juba, he said that oil had been found in a new oil eld in the northern part of the country. e eld appears to contain about 5.4mn barrels in recoverable reserves and is due to come on stream in late 2019, he said.
Both of the new nds lie in the Melut Basin, near South Sudan’s borders with Ethiopia and Somalia. ey are in northern Upper nile State and are not far from Adar, one of the blocks that DPOC is developing.
on the way up
Both announcements are good news. ey lend support to efforts to revive the domestic oil sector, which has had a rough ride since South Sudan gained independence in 2011.
e country produced 350,000 barrels per day (bpd) in its rst year of existence, and its reserves are among the largest in sub-Saharan Africa. nevertheless, civil unrest and ghting between various factions dragged yields down to a low of less than 130,000 bpd in 2014.
Output has yet to recover, even though it has moved upward as a result of the reduction in armed conflict. Production now stands at around 185,000 bpd, and the South Sudanese government hopes to see it rise again to 200,000 bpd by the end of this year and then reach 2011 levels in the early 2020s.
Large and small
If the country reaches this goal, Block 3 is likely to make a much larger contribution towards suc- cess than the unnamed eld that Chuang men- tioned on August 19. A er all, it is two orders of magnitude larger.
Additionally, it is under the control of one
P6
w w w . N E W S B A S E . c o m Week 34 29•August•2019