Scared workers at OVL fields in South Sudan

Vol 15, PW 5 (08 Sep 11) People & Policy

Sudan’s latest crackdown in the Blue Nile and South Kordofan states on its border with the newly independent breakaway nation of South Sudan is hitting work at the Greater Nile Oil Project (GNOP), where OVL holds a 25% stake.

PETROWATCH learns heavy border fighting and ethnic tensions are preventing workers from Sudan coming to work at the GNOP fields, most of which lie in the Christian-dominated south. “We’re hiring temporary workers as replacements for now,” says a source from Juba, the South Sudan capital.

“But a permanent solution must be found soon if our regular workers can’t cross the border.” Crude production of around 120,000 b/d from GNOP is largely unaffected but that might change if workers continue to stay away, we hear.

Meanwhile, OVL and partners Petronas, CNPC and Sudapet await clearances from the new South Sudan government to raise production to 130,000 b/d for the current year. “This target can be met only after negotiations between Sudan and South Sudan,” we learn.

“Both countries are entitled to share oil revenues.” Muslim-majority Sudan has been busy throughout August with Ramadan fasting and Sudanese officials could not begin talking to their South Sudanese counterparts until after the Islamic festival of Eid on August 31.

“Negotiations (over GNOP oil production targets) will begin after Eid,” he adds. Cooperation between Sudan and its breakaway southern neighbour is imperative as the pipeline evacuating crude from the GNOP fields in South Sudan passes through the north.

Land-locked South Sudan is believed to have contemplated laying its own separate pipeline to evacuate the crude, bypassing the north, but South Sudan president Salva Kiir Mayrdit personally rejected the idea of a costly new GNOP pipeline, adds our Juba source. South Sudan won independence from Khartoum on July 9 this year.