South Sudan wants Opec+ quota renegotiation

South Sudan would like to renegotiate its Opec+ crude production quota because fields at some blocks have resumed operations since it joined the group.

Oil ministry under-secretary Awow Daniel Chuang told Argus that the country's output was around 140,000 b/d when it agreed to participate in the Opec+ rebalancing act, but because some blocks have come back into production since then Juba would like a different target.

South Sudan pumped 165,000 b/d in September, Chuang said, down from 170,000 b/d in August and 190,000 b/d in July but still some way above its agreed cap.

South Sudan overproduced by an average of 46,000 b/d in the May-August period, according to an Opec+ internal document seen by Argus, meaning it was required to submit a plan on how it will compensate. It has not done this, and Chuang did not say when it would become compliant with its agreed output limit, which was 100,000 b/d between May and July and is 106,000 b/d for the remainder of this year.

Chuang pinned the recent production decline on increased water take from the country's ageing wells, and said that South Sudan still wants to raise production to 350,000 b/d by 2023 as part of attempts to stimulate an economy ravaged by years of war.

"We cannot reach our targets with the current wells but we are doing our best to change the technology to have our reservoirs produce more oil than water," Chuang said. He said that output could rise depending on the outcome of the country's inaugural licensing round, which the ministry has scheduled to take place in the first quarter of next year.

"We still have a huge potential since over 60pc areas that were surveyed for oil are still unexplored," he said. But efforts to increase production from existing fields have been hindered by lower prices, recent floods that limited field accessibility, and by the fragile nature of the country's peace.

Chuang acknowledged that these plans are also subject to South Sudan's participation in the Opec+ agreement, which runs until the end of April 2022.

By Mercy Matsiko