South Sudan upgrading the Bentiu oil refinery as oil and gas exploration kicked off in Jonglei state

South Sudan to upgrade Bentiu oil refinery as South Africa’s state-owned petroleum company the Strategic Fuel Fund (SFF) began its oil and gas exploration in Jonglei state, South Sudan

Sunday, 21 April 2024 (PW) — South Sudan is taking major steps to increase its oil refining capacity and attract foreign investment into its petroleum and mining sectors, moves aimed at boosting economic development in the world’s youngest nation.

The government has committed to upgrading the Bentiu refinery’s capacity to 10,000 barrels per day (bpd), a significant increase from its current modest output levels. At the same time, South Africa’s state-owned Strategic Fuel Fund (SFF) has launched an oil and gas exploration campaign in Jonglei state, conducting aerial surveys as a first step towards potentially drilling new fields.

The refinery expansion and new exploration represent critical investments that could help unlock South Sudan’s substantial oil and mineral wealth for the benefit of its people after years of conflict, instability and underdevelopment. However, challenges around security, infrastructure, environmental impacts and ensuring local communities benefit remain.

Upgrading the Bentiu Oil Refinery

During a visit to Bentiu on April 20th, Minister of Presidential Affairs Joseph Bagosoro stated “The government is working to increase the output production of the refinery for benefits to the local communities and significant improvements of the country’s economy.”

Bagosoro was part of a high-level delegation that included representatives from the joint operating companies running the oil fields. The government has secured $50 million in funding from Kenya Commercial Bank to expand and modernize the aging refinery over the next 8 months.

Currently, the refinery produces diesel, heavy fuel oils and asphalt at relatively low volumes for the local market. The capacity increase to 10,000 bpd would allow exports to neighboring countries and generate much-needed foreign exchange earnings.

“Refining our oil in our country and selling ready fuel to our people and neighbors will be the best thing we ever done to ourselves as a country,” said Unity State Governor Joseph Manytuil Wejang, highlighting the economic potential.

Both Bagosoro and Wejang acknowledged the need to mitigate environmental damage from oil operations and provide tangible benefits to local communities living near the oil fields and refinery.

“The government is aware of environmental effects caused by the oil pollution and refinery operation expansion, most to the community living proximity to the oil field,” Bagosoro stated. “The government is committed to providing basic necessities, schools, roads, and health services, and he stressed that employment opportunities must be given to the host communities as first beneficiaries of the project.”

Managing such impacts will be critical, as past oil operations have caused significant environmental degradation and social tensions when local communities have not seen benefits.

South Africa’s state-owned Strategic Fuel Fund (SFF) begun oil and gas exploration in Jonglei state

The South African delegation led by KB Trivedi highlighted the SFF’s new exploratory work in Jonglei state, including a large 47,000 square kilometer aerial survey completed last month in partnership with the South Sudanese Nilepet oil company and their joint venture Nile Orange.

“We have successfully completed the geophysical survey of the block in March. This is the largest survey ever undertaken in South Sudan…and the data acquired is very good,” Trivedi said. An environmental impact assessment will follow over the next 6 months.

Trivedi noted the SFF is in the process of merging into a new combined South African National Petroleum Company, which will take over its operations in South Sudan and potentially invest further in South Sudanese mining as well as oil and gas.

“In addition to petroleum projects in South Sudan, mining would be a very important part of the future bilateral engagement,” he stated.

While the Bentiu refinery upgrade and South African investment demonstrate South Sudan’s desire to develop its resources, significant hurdles remain after years of civil war and economic chaos.

Security is an ongoing concern in many oil-producing areas, with government and opposition forces frequently clashing. “The state government is committed to provide security and safety to all staffs working in the oil field and refinery,” Wejang assured. 

Lack of infrastructure like all-weather roads makes transportation of equipment and refined products expensive and difficult. Environmental rehabilitation and gaining community buy-in cannot be afterthoughts.

However, the financial incentives of unlocking South Sudan’s resource wealth are immense for both its government and international investors like South Africa’s SFF. If handled responsibly and transparently, developing the petroleum and mining sectors could finally bring economic dividends after decades of conflict and underdevelopment. But long-standing challenges must be overcome.

If you want to submit an opinion article, commentary, or news analysis, please email it to the editor: info@paanluelwel.com or paanluel2011@gmail.com. PaanLuel Wël Media (PW) website does reserve the right to edit or reject material before publication. Please include your full name, a short biography, email address, city, and the country you are writing from.

About Post Author