South Sudan’s government declared this past week the country is open for business, even though the president was noticeably absent from the nation's first “global” energy conference, which attracted only a few major energy companies.
Oil experts say South Sudan has 3.5 billion barrels of untapped oil and 85 billion cubic meters of natural gas, which should prove alluring to most big gas and oil companies.
South Sudan, however, also has a deadly conflict that is moving into its fourth year. Four million people – about a third of the population – have been displaced, with 2 million fleeing to neighboring countries.
Oil production is down two-thirds from its peak before the conflict broke out in December 2013. South Sudan now produces about 130,000 barrels a day, compared to 500,000 barrels a day in 2011, when the country gained independence.
Despite the challenges of investing in South Sudan, Vice president James Wani Igga, who stood in for President Salva Kiir, said South Sudan is “emerging as a powerful nation with a world class oil industry.”
“We look forward to working and coordinating with our neighbors to build modern oil and gas industry that take into consideration such as developing a national work force, investing in technical training, knowledge transfer, promoting indigenous companies, building infrastructure and allocating resources for domestic use,” said Igga.
South Sudan's petroleum minister, Ezekiel Lol Gatkuoth, said the government is working on a pilot project in gas exploration and is trying to establish four new oil refineries.
As for South Sudan’s insecurity, Gatkuoth said the government is putting efforts into ensuring that investors are given maximum security protection around the country, specifically mentioning the Dar Petroleum Operating Company and the Greater Pioneer Operating Company, which control major oil blocks.
“We want to maintain security. All the blocks. They are all protected for those who are always questioning the issue of security and your safety and the safety of your workers,” Gatkuoth said.
NJ Ayuk, executive director of Centurion Law Group, a West African company, said African governments must ensure the peace and stability of outside investors before companies are willing to send in personnel and equipment.
“Investment is important, but investment has to be protected. We cannot welcome people to Africa if we don’t create enabling environment for them to invest, be protected and continue to invest,” Ayuk said.
China National Petroleum Corporation, Petronas, Nilepet, Dar Petroleum, Sudd Petroleum and the Greater Pioneer Operating Consortia were some of the participants attending the two-day conference.
British firm Tullow Oil, a leading exploration firm on the continent which South Sudan officials had said appeared interested in an untapped block, was represented at the conference by its Africa president.