South Sudan to Resume Crude Oil Exports Through Port of Sudan Within Two Months

South Sudan is set to resume the exportation of crude oil through the Port of Sudan within the next two months, according to officials. This move is seen as a significant development that could shape the economy of the East African nation, which is still struggling with internal challenges.

The exportation will be done through the Jabalyn pipeline, and the two countries have renewed ties to facilitate this process. A high-placed source at the Ministry of Petroleum confirmed that efforts are being made to resume production and export through the Jabalyn pipeline.

The Vice President of the Transitional Sovereign Council of Sudan, Malik Agar, stated that significant efforts are being made to resume oil exports. However, the region is currently experiencing heavy rains that have caused floods, leading to death and destruction.

The oil exports through Sudan have also been affected by the ongoing conflict between the Rapid Support Force (RSF) and the Sudan National Army, which is fighting for control of the government.

Why this matters: The resumption of crude oil exports through the Port of Sudan is a vital development for South Sudan's economy, which heavily relies on oil revenues. This move could potentially provide a much-needed boost to the country's finances and support its efforts towards stability and development.

South Sudan has agreed to a $12.9 billion loan deal with a Dubai-based company, Hamad Bin Khalifa Department of Projects (HBK DOP), in exchange for crude oil exports over a 20-year period. The deal was negotiated between December 2023 and February 2024 with South Sudan's former finance minister, Bak Barnaba Chol.

Under the agreement, South Sudan will receive $5 billion in the first phase and over $3 billion in the second phase, with the company receiving two cargoes of Nile and Dar Mix crude oil per month. The deal is controversial as it is nearly twice South Sudan's GDP and will trap most of the country's oil revenues for many years.

The UN panel of experts has raised concerns about the deal, noting that 70% of the funds would be used for infrastructure despite the country facing famine and conflict. The loan agreement, which is the largest oil-backed borrowing ever undertaken by South Sudan, is expected to absorb over 90% of the country's oil revenues.

South Sudan's Minister of Petroleum confirmed that efforts are underway to resume oil production and export through the Jabalyn pipeline. The Vice President of the Transitional Sovereign Council of Sudan, Malik Agar, emphasized the importance of these efforts, stating, "Significant efforts are being made to resume oil exports." However, the ongoing conflict between the RSF and the Sudan National Army, as well as heavy rains and flooding in the region, pose challenges to the resumption of exports.

Key Takeaways

• South Sudan to resume crude oil exports through Port of Sudan in 2 months
• Exports to be done through Jabalyn pipeline, Sudan and South Sudan renew ties
• South Sudan secures $12.9B oil-backed loan from Dubai firm for 20-year exports
• Loan deal controversial, to absorb over 90% of South Sudan's oil revenues
• Ongoing conflicts and heavy rains pose challenges to resuming oil exports