Chaturvedi invites South Sudan leaders to Delhi

Vol 15, PW 19 (05 Apr 12) People & Policy

South Sudan first president Salva Kiir Mayardit and oil minister Stephen Dhieu Dau might soon be in Delhi, presenting a great opportunity for India to win a stake in a major proposed crude oil evacuation pipeline project.

PETROWATCH learns oil secretary Girish Chaturvedi wrote to foreign secretary Rajan Mathai on March 14 asking him to invite both Mayardit and Dau, and also Yasir Arman, secretary general of the South Sudan People’s Liberation Movement, the ruling party. “Keep in mind the significant oil and gas assets of OVL in South Sudan and the emerging ‘future prospects’,” writes Chaturvedi.

“The visit will provide an opportunity for OVL and (Indian) downstream companies to establish a strong foothold in South Sudan, a country so important for our energy security.” Chaturvedi wants to capitalise on landlocked Christian South Sudan’s tense relationship with its northern Muslim-majority neighbour Sudan, from which it won independence last July.

“It is understood the South Sudan government is looking to construct a separate pipeline either running south to Kenya or running east through Ethiopia to evacuate crude oil,” writes Chaturvedi. “This is to avoid remaining dependent upon Sudan.

South Sudan may also like to have a refinery in the country, at least to deal with domestic product demand.” Chaturvedi expresses concern that oil production at the Greater Nile Oil Project (GNOP) and Block 5A, where OVL has stakes, has been shut-in since January 20.

South Sudan’s government ordered the shutdown of all oilfields in its territory after the North demanded steep oil ‘transit fee’ of $32.2/barrel. As a result, OVL is losing 35,000 b/d.

South Sudan accounts for 75% of oil production from these fields but the North has the entire pipeline, refining and export infrastructure.