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Sudan oil revenue drops to record lows

May 25, 2017 at 2:06 pm

A general view of the port of Kharg Island Oil Terminal in Iran on 12 March 2017 [Fatemeh Bahrami/Anadolu Agency]

Sudan’s daily oil production revenue has sunk to its lowest level since the secession of South Sudan almost six years ago, the minister of petroleum revealed yesterday.

Speaking before the Sudanese Parliament, the newly appointed petroleum minister Abdel-Rahman Osman also explained that the daily oil production level had fallen, “the country’s oil production fell to 129,000 barrels per day (bpd) which represents only 75 per cent of the targeted production in 2016.”

The minister attributed the revenue decline to the drop in global oil prices; however, he stressed that Sudan’s identified oil reserves rose by 15.6 million barrels. He said revenues from the sale of domestic crude oil amounted to $388 million with the total production of oil standing at eight million barrels for the first quarter of this year.

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Sudan’s oil and gas minister disclosed in November last year that the country had an outstanding debt to the China National Petroleum Corporation of $2 billion and last month it was revealed that Sudan owes $418 million to the Indian State Petroleum company, ONGC Videsh, following the decision not to extend one of the company’s oilfield licenses.

Sudan is struggling to recover more than $2 billion of revenue owned by South Sudan and has also been unable to encourage sufficient investment in the sector owing to the ongoing armed conflicts. Most of Sudan oil reserves are centred in East Darfur and Southern Kordofan and the current lack of security has been a disincentive for oil companies to invest.

Last year, the then Minister, Mohammed Awad Zayid, announced 253 new exploratory wells to be dug with reserves of up to 65.4 million barrels of oil and 300 billion cubic feet of gas. Zayid said he was hoping to attract foreign investment to open new fields and help pay off Sudan’s debts.

As a united country producing oil in the 1990s, Sudan generated at its height up to 520,000 barrels per day before losing 75 per cent of production when South Sudan became an independent country in July 2011.