South Sudan has pushed its short-term target to grow crude output to 230,000 b/d back by a couple of years to 2026. But the country has an ambitious goal to reach 450,000 b/d in the longer term.
The 230,000 b/d target was originally set for 2024, but it has been postponed by two years as the country grapples with challenges related to flooding, logistical issues due to the ongoing war in Sudan, as well as a lack of oil sector investment, a source close to the matter told Argus.
South Sudan's crude output currently stands at around 170,000 b/d, according to official government data seen by Argus. This is well below the 300,000 b/d it was producing in the first few months following independence from Sudan in 2011, but it is 46,000 b/d above the country's current 124,000 b/d Opec+ output quota.
South Sudan — one of the 10 non-Opec countries to join Opec in creating the Opec+ producers' alliance in 2016 — has consistently produced above its allocated quota. It has been demanding a change to its production baseline — the number from which member countries' output limits are calculated — to make it closer to the 200,000 b/d it was producing before civil war erupted in the country in 2013.
Last month, Opec+ members made a commitment to undergo an external assessment in 2024 to determine their production capacities and production baselines. South Sudan's oil minister Puot Kang Cho told Argus at this week's Opec seminar in Vienna that he hoped the new system would capture his country's true capacity.
Big ambitions
Longer term, Cho said South Sudan plans to reach 450,000 b/d but said this would only be possible with investment from international oil companies. The minister said he has held talks with several companies and is hopeful of signing some deals. "But I don't know whether they will fulfil. I'm waiting," he said.
The more immediate challenge is keeping current output flowing. Landlocked South Sudan is entirely reliant on its neighbour Sudan — which is currently mired in a civil war — to export its oil. The majority of its crude is piped to Sudan's Red Sea port of Bashayer for export, with a portion going to Sudan's 100,000 b/d Khartoum refinery.
While previous periods of conflict in Sudan have led to export disruptions, loadings from Bashayer have yet to be affected during the latest fighting. But South Sudan is now having to import oil field equipment through Kenya and Djibouti, which is complicated from a logistical point of view and more expensive. Equipment previously came via Sudan.
Asked if South Sudan could use trucks to export its oil in the event of disruptions in Sudan, Cho said alternatives are being considered. "We are looking at options as to how we should continue to survive as a country," he said.
Oil revenues are the lifeblood of South Sudan's economy, and any disruption to exports would put the country in a precarious position.
