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South Sudan orders resumption of oil output

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(Globalpost/GlobalPost)

South Sudan ordered oil companies in the country to resume production Thursday and end a 14-month-old shutdown sparked by furious arguments with rival Sudan, officials said.

"The foreign oil companies and pipeline operators... are hereby ordered and instructed forthwith to recommence and re-establish the production of crude oil," oil minister Stephen Dhieu Dau said in a statement.

The order, read out to the heads of oil companies, follows the signing on Tuesday of the latest string of deals between Juba and Khartoum to restart the flow of oil.

Oil companies in South Sudan include Malaysian state-owned Petronas, China's National Petroleum Company (CNPC), and the Sudd Petroleum Operating Company (SPOC), a joint venture between Petronas and South Sudan's government.

Last October South Sudan issued similar orders to oil companies to resume production, but Khartoum scuppered the deal after accusing South Sudan of backing rebels on its territory.

"South Sudan officially from today is now giving the order to the operators to start production, and we hope that within a short time the oil will flow," Dau added.

If the agreement is followed -- and multiple previous deals have been ignored -- it could still take several weeks for companies to reopen pipelines closed for 14 months.

The exact date for a restart will "depend on the technical readiness" of the companies, Dau added.

Emi Suhardi Mohd Fadzil, president of SPOC, which operates in South Sudan's Unity state, said he hoped they "should be back in production within three to four weeks."

The two neighbours are increasingly cash-strapped after Juba shut down oil output a year ago in a furious row accusing Khartoum of stealing its crude.

Since then the former civil war foes -- which fought again along their undemarcated border in March and April 2012 -- have failed to implement a string of deals.

Khartoum accuses South Sudan of supporting rebels -- former comrades during the 1983-2005 civil war -- which has been a major obstacle to implementing agreements.

The South, in turn, says Sudan backs insurgents on its territory, a tactic it used to deadly effect during the two decades of civil war.

However, Sudanese President Omar al-Bashir this week accepted an invitation to visit Juba for the first time since South Sudan won independence in July 2011, although no date has been announced.

When it gained independence, landlocked South Sudan inherited two-thirds of the former unified country's oil, while crucial pipelines, processing facilities and the only port remained in Sudan.

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http://www.globalpost.com/dispatch/news/afp/130314/south-sudan-orders-resumption-oil-output