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South Sudan Says It’s Ready to Restart Oil Production

Nov. 6 (Bloomberg) -- South Sudan will begin pumping oil this month after nine months of a production shutdown sparked by a dispute over transportation fees with neighboring Sudan, government spokesman Barnaba Marial Benjamin said.

“The technicians, the ones who actually work on the oil wells and the pipeline, they gave an assessment to say oil can begin to flow in the next couple weeks,” Benjamin said by phone today from Juba, South Sudan’s capital.

Oil technicians from Sudan and South Sudan met in recent days in Juba to discuss restarting output, he said. Production will begin first in fields in Upper Nile state, while those in Unity state, which were damaged during armed clashes between the countries in April, “will need a little longer.”

South Sudan halted production in late January after accusing the northern government in Khartoum of stealing $815 million worth of its oil. Sudan said it confiscated the crude to make up for unpaid transportation and processing fees. Sudanese President Umar al-Bashir and South Sudan’s leader, Salva Kiir, signed a series of agreements on Sept. 27, including an oil accord that stipulates a fee schedule.

South Sudan acquired three-quarters of the formerly united Sudan’s output of 490,000 barrels a day when it declared independence in July 2011, following a two-decade civil war.

Oil in South Sudan is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s ONGC Videsh Ltd.

Sudanese Foreign Affairs Ministry spokesman al-Obeid Murawih said his country’s pipelines and export facilities on the Red Sea are being prepared for use this month.

“As I hear from the ministry of oil here in Sudan and also from the other side, they will be ready,” he said by phone today from Sudan’s capital, Khartoum.

To contact the reporter on this story: Jared Ferrie in Juba, South Sudan, at jferrie1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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