South Sudan could pump some oil by end-November - minister

JUBA Sat Nov 3, 2012 4:13pm GMT

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JUBA (Reuters) - South Sudan could resume producing up to 230,000 barrels per day (bpd) of oil within a month, its oil minister said on Saturday, after a nine-month shutdown that has battered the country's economy.

The landlocked African producer, which seceded from Sudan last year, shut down its entire output of about 350,000 bpd in January in a dispute with Khartoum over how much it should pay to export oil through Sudan.

After striking a deal to resume crude flows, South Sudan aims to restore full output in its Upper Nile state oilfields by March and in its Unity state fields by May, Stephen Dhieu Dau told Reuters in an interview.

Restoring production would give a much-needed boost to the new nation, which depended on oil for 98 percent of government revenues before the shutdown.

Dau said within a month South Sudan could pump between 180,000 to 200,000 bpd from the Upper Nile fields - roughly 70 to 80 percent of the fields' full output - and around 30,000 bpd from the Unity fields, about 30 percent of their potential.

The estimate is faster than the ministry's previous guess of about 90 days to restart production, he said, adding Sudanese officials had told South Sudan that northern infrastructure was ready for the resumption of oil flows.

"From our side we said we are now at 80 percent readiness. I can disclose to you that within the month, if we complete the remaining 20 percent, we will be resuming shorter (sooner) than we said before," he said.

"It will be less than 90 days because the technical preparations are in place."

South Sudan aims to boost Unity state production to about 100,000 bpd, up from around 70,000 before the shutdown, by adding new wells and introducing new technologies for existing wells to improve recovery, Dau said.

That would bring the country's total output to around 370,000 to 380,000 bpd, he added.

Dau said the country had been attracting more Western oil services companies including Halliburton Co (HAL.N), Schlumberger (SLB.N) and Dietsmann from the Netherlands.

South Sudan depends on pipelines and a port in Sudan to get its crude to market. The two fell out over how much it should pay to do this, pushing South Sudan to shut down its wells.

Over the last few months, the two have signed oil, security and border deals that would allow crude flows to resume.

BLOCK B DIVISION

Dau said South Sudan would take a final decision about a major block controlled by French firm Total (TOTF.PA) after production resumed.

Southern officials have said they planned to divide the block, known as Block B, into three parts and bring in new companies to speed up exploration.

"For Block B there is no one scenario so far that has been reached. The government is still talking with the potential operators of Block B, including Total of course," he said.

"Definitely Block B will not be any longer continuing as Block B, it will be blocks of Block Bs, it will be many Bs," he said, declining to specify how many.

He added South Sudan had talked to Exxon-Mobil (XOM.N), a company other officials have said could come into the new arrangement, and was talking to other firms from Asia, Europe, the United States, Latin America and Africa over the block.

On Wednesday, a Total executive said the firm was confident of reaching a deal with South Sudan and was ready to resume work with a new partner in the block, which the firm has held since 1980 but where it halted exploration because of Sudan's civil war.

South Sudan signed a deal with Ventech in October to build a 10,000 bpd refinery in Upper Nile state's Melut area, Dau said, adding the firm planned to finish it by June or July next year, but it would depend on "operational logistics" and equipment imports.

APR Energy (APREN.L) would establish a 180 megawatt power plant in Upper Nile to use residue from the refinery, he said.

(Writing by Alexander Dziadosz; editing by Patrick Graham)

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