Ethiopia will soon start importing cheaper refined oil from South Sudan to substitute the more expensive product from the Middle East.
Koang Tutlam, Ethiopia’s State minister for Mines and Petroleum, announced on Wednesday that this will save Addis Ababa 15 per cent to 20 per cent on the $3.4 billion it spends importing close to four million tonnes of refined products.
“We import almost all of our oil and other refined products from the Middle East, but owing to the proximity of about 200km between the oilfields of Pagak and Adar and the Ethiopian border, we stand to save so much,” Mr Tutlam told journalists attending the two-day South Sudan Oil and Gas Conference in Juba.
The conference was organised by South Sudan’s Petroleum Ministry in partnership with African Oil and Power, an organisation that brings together ministers and senior government officials and top executives of private sector companies spanning the energy value chain.
It is meant to explore ways of utilising oil resources to achieve economic stability. Delegates came from Kenya, Ethiopia, Egypt, Somalia, Norway, the US and South Africa.
Mr Tutlam said his country exports hydroelectric power to South Sudan and will soon export about 400MW to Kenya.
South Sudan has the third-largest oil reserves in sub-Saharan Africa estimated at 3.5 billion barrels, most of it unexplored.
He noted that if the revitalised peace process that is anchored on championing stability and economic recovery comes to fruition, Ethiopia will become a big market for South Sudan’s oil.
“I think all will be well after two to three years after which the two countries can put up infrastructure that will benefit both nations,” he said.
At the same time, South Sudan and Egypt signed a co-operation agreement in downstream oil and gas operations in which Egypt will install gas facilities across South Sudan.
Juba’s undersecretary in the Ministry of Petroleum Mayen Wol signed the agreement with Egypt’s state oil company, Egyptian National Petroleum Corporation.
The agreement was one of the highlights of the conference where Juba also announced it will be floating 14 oil blocks for exploration from early next year.
Other Egyptian companies in attendance were Petrojet, Petrogas, Al Khorayef and Drexel Oilfield Equipment.
Recently Egyptian President Fattah Al-Sisi asked Egyptian oil exploration and production companies to venture into Sub-Saharan Africa and specifically asked companies to invest in South Sudan.
Last week, Sudd Petroleum Operating Company announced it would resume oil production at the end of the year. Its oilfields, which produce 80,000 barrels per day and were shut in 2016. They could boost the country’s oil output substantially from the present 178,000 barrels per day.
And last week in Sochi, Russia, President Al-Sisi who holds the chairmanship of the AU for 2019, affirmed Egypt’s continued support of the people of South Sudan and efforts aimed at achieving a final, peaceful political settlement in Juba.
South Africa’s Strategic Fuel Fund, which signed an exploration and production sharing agreement in May 2019, said it would start aerial surveying of block B2 in December.
“We hope to reach an oil output of 250 000 barrels per day in the near future with the support from our partners and neighbouring countries,” said South Sudan Minister of Petroleum Daniel Awow Chuang.
Realising that goal, however, depends on President Kiir and rival Riek Machar forming a government of national unity on November 12.
—Additional reporting by Xinhua
