S05 ORA 4 2020 South Sudan report_ORA Master Template - 2016 New 21/08/2020 13:35 Page 16
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ISSUE 4 2020 • WWW.OILREVIEWAFRICA.COM
SOUTH SUDAN LOOKS TOWARD
POSITIVE REGIONAL RELATIONS Understanding the relationship between South Sudan and Sudan, as well as relations with East Africa, is important for understanding how the hydrocarbons sectors across this challenging but dynamic region can be constructively developed in the coming years. Safety and security remain important considerations as South Sudan seeks to progress economically.
Image Credit: UNMISS
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AR WARMER RELATIONS between Juba and Khartoum since the overthrow of Sudan’s longtime president Omar al-Bashir last year could boost South Sudan’s attempt to grow its oil industry and allow it to focus more fully on building regional trade ties. Al-Bashir was unseated following popular protests that could help to bring peace to Sudan and greater economic security to its southern neighbour. South Sudan became independent in 2011 after
fighting long secessionist wars against Sudan in 1956-1972 and 1983-2005. However, as one of the most oil revenue-reliant economies in the world, South
Even during difficult times, South Sudan has never failed to pay its northern neighbours.”
Sudan was forced to continue piping oil across the border into its northern neighbour and on to Port Sudan for shipping around the world. Under the terms of a 2012 cooperation agreement between the two countries, Juba is required to pay Khartoum US$24.10/barrel of Dar Blend and US$26/barrel for Nile Blend – its two export crudes – which obviously leaves very little for South Sudan when oil is priced at US$30 or US$40/barrel. As the table on the opposite page shows, the lion’s share of
these figures comprises the Transitional Financial Arrangement (TFA), which sets out the fees South Sudan had to pay to Khartoum to compensate the latter for the loss of oil income. It was due to expire at the end of 2016 but was extended for three more years because of falling output and lower international oil prices. However, South Sudan has set 2020 as a year of peace and growth, underlined by the formation of the unity government as well as its active oil and gas sector and sizeable
