South Sudan crude output halves on pipeline blockage

South Sudan's crude production has almost halved to around 80,000 b/d because of a blockage at a pipeline in war-torn Sudan, South Sudan's oil ministry undersecretary William Anyak Deng told Argus today.

A blockage along the Chinese-led Petrodar Pipeline is currently preventing around 100,000 b/d of South Sudan's heavy sweet Dar Blend grade from reaching Sudan's Bashayer terminal on the Red Sea for export, Deng said. But production of South Sudan's medium sweet Nile Blend grade has not been impacted, as this is transported to Bashayer through the separate Greater Nile oil pipeline which remains online, he said.

His comments come after Sudan earlier this month warned major oil exporting companies in South Sudan that his country could no longer carry out its obligation to transport their crude.

Dar Petroleum Operating Company (DPOC) — a consortium including China's state-controlled CNPC and Sinopec and Malaysia's state-owned Petronas — produces Dar Blend but has had to all but cease output, Deng said.

Nile Blend production is split between the South Sudan-based firms Sudd Petroleum Operating Company (SPOC) and Greater Pioneer Operating Company (GPOC) and currently running at around 80,000 b/d, he added. South Sudan's crude production stood at around 150,000 b/d in February, according to Argus estimates.

The blockage is a result of gelling issues — solidifying crude — in the Petrodar Pipeline, which Sudanese and South Sudanese engineers are struggling to resolve. This is because of a lack of diesel that is used to heat the crude or dilute it to help it flow, Deng said.

"We are working to resolve the problem right now. There is mechanical work that is ongoing, we are trying to flush out the oil," he added.

But the pipeline has been suffering from leaks and pressure drops for months, with repairs complicated by the ongoing civil war in Sudan between the army and the paramilitary Rapid Support Forces.

Deng said it was becoming increasingly difficult to get permission from the warring parties in Sudan to move workers, equipment and spare parts to maintain infrastructure. He also said South Sudan has been sending diesel to Sudan to help with repair work given the closure of Sudan's 100,000 b/d Khartoum refinery which has come under repeated fire since the civil war began last year.

Sudan also typically produces around 50,000 b/d of mostly Nile Blend crude, but this is thought to have been impacted by the civil war.

Crude exports from Sudan's Bashayer port averaged 130,000 b/d in 2023 and hit 168,000 b/d in January, according to Kpler. But exports have only averaged about 75,000 b/d since February.

Landlocked South Sudan is entirely reliant on Sudan to export its crude and depends on oil sales for more than 90pc of government revenues. Any prolonged disruption to exports would put the country's economy in a precarious position.

By Aydin Calik