South Sudan confirms oil pipeline need


“Agreements with Ethiopia and Djibouti intact”

South Sudan downplayed allegations about disregarding agreements it made with Kenya, Ethiopia and Djibouti after the former resumed oil exports via the pipeline in Sudan. The newest state and the 54th member of the African Union (AU) had stopped oil production about a year ago as a result of the ongoing disagreement it had with Sudan over tariff issues. “We were requested to pay USD 6 per each barrel,” Barnaba Marial Benjamin (Dr.), Minister of Information and Broadcasting of the Republic of South Sudan, said.
About a year ago, the country had signed a trilateral agreement with Ethiopia and Djibouti to construct a new pipeline that goes through Ethiopia to the Port of Djibouti. The country has also plans to install another pipeline through Lamu to Kenya.
On March 12, 2013, South Sudan resumed oil production, because it has reached an agreement with Sudan to use the pipeline crossing their territory.  “We have resumed production, because we have agreed the tariff per barrel will be USD 1,” Benjamin stated. Previously, there have been allegations that the South Sudanese had a tendency to disregard agreements it made with other countries, because of the agreement it made with Sudan.
The Minister pointed out that the two agreements have nothing to do with the pipeline with Sudan as they are still needed by the country to increase its fuel exports. “The disagreement over the use of the pipeline through Sudan wasn’t the reason why South Sudan signed an agreement with Ethiopia and Djibouti. The agreements we signed with the two countries is important because the oil deposit in our country is supposed to have increased,” said the Minister. According to him, there will undoubtedly be enough oil that requires additional pipelines. “The amount of oil deposit is liable to increase, which will need additional pipelines. The one through Ethiopia to Djibouti is needed; therefore, the appropriate agreements have been signed,” he said.  “There is a huge oil deposit in Jonglei State, which borders Ethiopia. Total Oil Company is getting involved in the development of the site.” The oil that goes to and through Sudan is only from the Upper Nile and Unity States, according to the Minister.
A German company is undertaking the feasibility studies and assessing the cost for the pipelines that will be constructed from South Sudan through Ethiopia to Djibouti and from South Sudan to the Port of Lamu, Kenya. “After assessments are made, we will decide which pipeline to construct and use quickly. Apart from that, we will still be transporting our oil through Sudan, since we have agreed on the tariff,” the Minister affirmed.
The Minister, who passionately called upon investors to invest in his country and be part of the huge developmental activities it is undertaking, stated that every type of business in South Sudan is open for the private sector, including expatriates. “The telecom sector, the banking industry, media, industries and others are open for the private sector, with the government’s interest being a matter of regulation only for the sake of security,” Benjamin informed Capital.   He said, so far, the newest state has been able to attract five telecom operators and several banks, including the Commercial Bank of Ethiopia (CBE). “CBE is helping with a lot of investment opportunities, for both South Sudanese and Ethiopians, in the country”.