March 02, 2014 [Khartoum (AFP)] — Fighting in South Sudan has cut production from the country’s lifeline oilfields by about 29 percent, the press secretary to President Salva Kiir said in Khartoum on Sunday.
“South Sudan is still getting more than 175,000 barrels a day,” said Ateny Wek Ateny.
That amount is down from 245,000 barrels per day before fighting began in mid-December between forces supporting Kiir and those from a loose alliance of ethnic militia and army defectors loyal to ex-vice president Riek Machar.
Ateny did not give a dollar figure for how much revenue the government has lost, and said a true assessment can come only after fighting completely stops.
“I know that there are a number of properties that are destroyed in Bentiu, in Bor and in Malakal and we cannot have the assessment now until the war is over,” he said.
In late February, rebels loyal to Machar captured Malakal, the capital of Upper Nile state where most of the South’s oil is produced.
The rebel move on Malakal came despite a ceasefire that was supposed to be in place.
Government forces in January recaptured Bentiu, the capital of another oil-producing area, Unity State.
India’s ONGC Videsh Ltd, a partner in two joint oil production companies in South Sudan, announced on December 26 that the firms had temporarily halted operations there because of deteriorating security.
Those fields were producing more than 40,000 barrels daily.
South Sudan became independent from Sudan in July 2011 after a peace deal ended 22 years of civil war.
The South split with about 75 percent of united Sudan’s oil production, but pipelines and the Red Sea export terminal remained in the north.
Under an agreement between the two countries, Sudan was to receive an estimated $1.5 billion this year in South Sudanese fees for using the northern export infrastructure, and a package to compensate for the loss of the South’s oil at separation.
That revenue due to Khartoum was down about 20 percent since fighting began in December, a Western diplomat said last month.
The northern economy was already struggling with a shortage of foreign reserves, a weakened currency and soaring prices since South Sudan separated.
The lost crude accounted for most of Khartoum’s export earnings and half of its fiscal revenues.
In the South, oil made up about 80 percent of 2012 gross domestic product (GDP), but even before war broke out in December it was one of the continent’s least developed countries.
GDP amounted to just $10.22 billion in 2012, according to the World Bank.
Thousands of people have been killed and almost 900,000 others forced from their homes by the fighting in South Sudan, which began as a power struggle between Kiir and Machar.
Oil industry analysts have cited the unrest in South Sudan as a factor supporting global crude prices.