South Sudan Orders Resumption In Oil Output

JUBA, South Sudan - South Sudan ordered oil companies in the country to resume production Thursday to end a nine-month shutdown sparked by furious arguments with rival Sudan that had escalated into border conflict, officials said.

"The foreign oil companies and pipeline operators...are hereby ordered and instructed forthwith to recommence and re-establish the production of crude oil," Oil minister Stephen Dhieu Dau said.

The order to begin pumping oil again followed deals signed last month by Sudan and South Sudan on security, oil and cooperation, and which were ratified by parliaments in Juba Tuesday and in Khartoum Wednesday.

"The resumption of crude oil production, petroleum operations and transportation shall be carried out immediately," the statement said.

The order was read out to the heads of oil companies including Malaysian state-owned Petronas and China's National Petroleum Co.

But Dau said it would still take at least three months before the crude reached buyers because reopening pipelines was a potentially complicated process.

"We assume that in 90 days a part of our oil may be getting to the international markets," he told reporters.

In January, South Sudan cut off oil production even though the activity provides about 98% of its total revenue, crippling the economies of both countries, after accusing Sudan of stealing its crude.

"The shutdown of oil production previously authorized by the Republic of South Sudan has served its purpose to protect the sovereignty and patrimony of the nation," the statement said.

"Conditions are now present to ensure once again that the South Sudanese people may exercise the right to enjoy the full benefits of their resources."

When it gained independence in July 2011, landlocked South Sudan obtained two-thirds of the former unified country's oil, while crucial pipelines and processing facilities remained in Sudan.

Copyright (c) 2012 Dow Jones & Company, Inc.


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