By Eng. Jacob Chol Garang
INTRODUCTION
South Sudan, the world’s youngest nation has for long time been dubbed the food basket and hub for socio-economic development in the East African Region and Africa as a large since its independence in January 2011 from their neighboring Sudan after decades of civil war since independence from British in 1956. South Sudan is the leading producer of Oil in the East African Region and third Nation with the largest Oil reserves in the Sub-Saharan Africa. Its proven oil reserves from the existing producing blocks of Melut (3 &7), Unity (1, 2 & 4) and Tharjiath block (5A) are estimated at 1.5 billion barrels with its production experiencing a steep decline as a result of internal conflict since December, 2013.
South Sudan has hit a minimum production of 130,000 barrels per day and a maximum of 350,000 barrels per day between 2011 and 2021. These discrepancies in production are as a result of the conflict which has put a blockade to the petroleum management institutions in the Country from stirring up development of the required infrastructure and systems for the industry to hit its full potentials. Efforts have been put in place since the establishment of Petroleum industry in South Sudan after inheriting it from the neighboring Sudan in July, 2011 to establish a robust Petroleum Management System with the passing of “Petroleum Revenue Management Act, 2012” as a blueprint.
This Act was founded for the provision of management of Petroleum Revenues in the Republic of South Sudan, establishment and management of the Petroleum Revenue Account and the Reserve Funds, transfers and withdrawals to and from these accounts, and for related matters. Investment and protection of Reserve funds, investment board establishment, Transfer of Petroleum Funds to Producing States and Communities, Transparency and Accountability and Supervision were all components of the Act which I believe have not all been put into practice though some components have been to some extent fulfilled.
With the signing of R-ARCSS in 2018 in Addis Ababa, Ethiopia between the faction groups and the government, hopes and optimism have been restored in the nation and this will now divert the attention and efforts towards the development of the sector to realize its full potentials which will eventually lead to the socio-economic development of the Nation, East African Region, Africa and the rest of stakeholders worldwide.
SOUTH SUDAN’S PETROLEUM DEVELOPMENT STRATEGIES TO UNLEASH FULL PETROLEUM RESOURCES TO ACHIEVE SOCIO-ECONOMIC GROWTH
The Petroleum Revenue Management Act establishes a formalized structure for distribution of petroleum revenues to immediate budgetary needs, savings and revenue stabilization, and direct transfers to petroleum producing states and affected communities.
The former Southern Sudan president and revolutionary leader of SPLA/M late Dr. John Garang de Mabior stated that “Oil money should be utilized for Agricultural development and for investment in other economic sectors”. He was referring to effective and efficient management of oil revenues as South Sudan blueprint for creation of sustainable and self reliance economy. This has to be achieved through adaptation of the following strategies:-
Development of Petroleum skilled personnel and Petroleum Technologies
As a pioneer in the oil and gas industry in East African region, South Sudan should on top of its agenda establish a training scheme for Petroleum workforce such as Geoscientists, Engineers, Economists, Accountants, and Lawyers in the Petroleum Sector to proactively navigate through oil and gas business dynamics both locally and internationally.
The Oil and gas industry is one of the most complex industries from stakeholders and contractors points of view. Essential skills and competencies for managers, supervisors and all employees of the sector are much needed to provide opportunity to understand from business aspects of the entire value chain, technological advancement and world’s energy demands.
South Sudan needs to strengthen the already existing NILEPET training centre by establishing equipped workshops/fabrication centres, bring in tutors of various expertises in oil and gas business to impart knowledge and skills on the Petroleum workforce of South Sudan and developing a proper professional roadmap for all Workforces in the sector. With the availability of Oil and gas facilities in the producing blocks such as Unity field, Tharjiath and Paloch, transmitting practical knowledge to the trainees would be easy and this would definitely attract oil and gas professionals from other countries and in particular the East African nations that will be joining South Sudan in the nearest future in production of commercial oil and gas.
Establishment of Petroleum Refineries and Petrochemicals Industries
Petroleum refineries are very essential facilities in the Petroleum Sector; these are facilities that convert and refine crude oil into more useful products such as diesel, petrol, gasoline, naphtha, Aviation fuels, kerosene and other heating/fuel oils. Petrochemical plants on the other hand are complex facilities that utilize products from petroleum refineries as feed stocks for producing other more useful products that are used on daily life basis. Petrochemicals are basically derived chemical compounds produced either directly from Petroleum or from refined petroleum products such as kerosene, gasoline, wax, asphalt and lubricating oils. Petrochemical plants products and intermediate products include ethylene, propylene, plastics, soaps & detergents, fertilizers & pesticides, paints, rubber and so many more. Establishment of such plants can create employment opportunity to the majority of the population in the nation and the region as a whole. Sales of such products locally and internationally can eventually bolster socio-economic growth within and abroad.
Development of Petroleum Infrastructure
Petroleum Infrastructure plays an integral role in the world economy. The Petroleum infrastructures are expensive and complex assets of Petroleum industry in the world which are mostly political in nature. They pose operational and environmental challenges but come with significant economic benefits in the Country. They include Pipelines, Wells, Processing facilities, Storage facilities and Loading terminals. Most of the fuel needed for transportation and power generation, cooking gases and heating oil need to be produced and delivered closer to the final consumers and this operation can be impossible without these Infrastructures of Petroleum. Investment in such infrastructure can gear up socio-economic growth as crude and refined products find their way to market across the Country and the region creating several job opportunities along with it.
Exploration and Development of new Petroleum Blocks to increase Crude Oil volumes produced nationally
Exploration and production (E&P) is a broad term used in the petroleum industry which encompasses exploration, appraisal, development, production and decommissioning of the Petroleum blocks. Exploration and production includes Upstream, Mid-stream and Downstream of the Petroleum industry. South Sudan is one of the Countries in Sub-Saharan Africa with arguably the highest reserves of Petroleum. Currently 14 blocks across the Country are believed to have Oil potentials in South Sudan which when sourced out to reputable international oil and gas companies to explore and produce can boast massively the GDP of the Country within the next ten (10) years. These blocks have already been explored; the next phase is the appraisal phase in which blocks potentially containing economical viable quantities of crude oil are studied in depth. The exploratory wells are in this stage drilled to locate and map oil reserves for commercial production. If a portion of the Oil revenues from the current producing blocks is put aside for the development of access infrastructure to these blocks and stabilization of security situation in the country would be a step in a right direction to ease the processes of exploration and production in such areas.
Allocation of Petroleum Revenues for the development of other economic sectors such as Agriculture, Mining, Hospitality, Environmental conservation, Education, Tourism, Fishing etc.
Being gifted with various natural resources, South Sudan can use Petroleum revenues to develop institutions for the respective resources. The River Nile is one of the resources that have the potential to produce regional hydro-power through construction of dams. Fishing industry along the River Nile and the Vast Sudd wetland can be established and fish can be exported to Middle East and the Rest of the world. The fertile agricultural land with abundance rainfall most of the year is capable of feeding the whole Africa and the rest of the world through commercial farming and establishment of plantations. Gold, diamonds, hardwoods, limestone, iron ore, copper, chromium ore, zinc, tungsten, mica, silver to mention but a few are a luxury when it comes to resources potentials in South Sudan.
All these potentials can be realized through proper management and allocation of portion of current Petroleum revenues which is the current major source of income to the nation with over 90% of GDP coming from the Petroleum Industry.
CONCLUSION
Proper Petroleum Resources Management System can unlock all potentials of South Sudan and transform it to one of the biggest economic powers in the East African Region, Africa and the world at large. These potentials will not only stir up its socio-economic growth but also the East African region, Africa and the rest of the world through partnerships, technological transfers, marketing and international relations.
Effective and Efficient use of Petroleum revenues can speed up infrastructural development such as Roads & Highways, Clean Portable water network in all South Sudan cities, Production of enough Electricity by construction of Power plants that consume either crude oil directly or heavy fuel oil (HFO) that can potentially be produced from refineries. These three (3) strategic infrastructural developments are the fundamentals of development in any nation which are very much possible to achieve through optimized utilization of petroleum revenues.