South Sudan to return to pre-war oil production levels ‘by 2020’

The country has one of the largest reserves of crude oil in the region. (Reuters)
Updated 11 February 2019
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South Sudan to return to pre-war oil production levels ‘by 2020’

  • The world’s youngest country, which split from Sudan in 2011, has one of the largest reserves of crude in sub-Saharan Africa, only a third of which have been explored so far

GREATER NOIDA, India: South Sudan will return to producing more than 350,000 barrels of crude per day by the middle of 2020, up from current levels of just over 140,000 barrels per day (bpd) currently, the country’s oil minister said on Sunday.
Production is expected to rise to 270,000 bpd by the end of 2019, Oil Minister Ezekiel Lul Gatkuoth told Reuters. He was speaking on the sidelines of the Petrotech conference in Greater Noida, a satellite city of India’s capital New Delhi.
The world’s youngest country, which split from Sudan in 2011, has one of the largest reserves of crude in sub-Saharan Africa, only a third of which have been explored so far. The country lost many oilfields to a civil war that broke out two years after its independence. A September peace agreement is largely holding.
“By the end of the year, block 3 and 7 will be hitting 180,000 bpd, blocks 1, 2 and 4 will be producing 70,000 bpd, and block 5A will be producing 20,000 bpd,” Gatkuoth said.
“We used to produce 350,000 to 400,000 bpd. We expect to go back to those levels by the middle of next year,” he said.
South Sudan has signed a preliminary agreement with Russia’s Zarubezhneft for exploring some of the blocks, Gatkuoth said.
“They are interested in block B1, B2, E1 and E2. We will be working to see where they are likely to be interested in the most,” he said.
South Africa, which has committed to investing $1 billion in the country, would collaborate with South Sudan on the construction of pipelines and a new refinery along the border with Ethiopia, the minister said.
“We have agreed to build a refinery on the border of Ethiopia, we have already signed an agreement with Ethiopia to offtake refined products,” Gatkuoth said.
Land-locked South Sudan is looking to boost its export options as it looks beyond its neighbor Sudan, the minister said: “We have new blocks in the southern part of South Sudan, oil from which will be exported to East Africa (through the new pipelines).”
American oil majors such as Exxon Mobil and Chevron showed interest in investing in South Sudan, but are currently not interested because of the conflict, he said.
“We have been approaching Exxon officials, and I will be meeting them in Houston next month,” he said.


Gulf defense spending ‘to top $110bn by 2023’

Updated 15 February 2019
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Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”