South Sudan’s Petroleum Minister, Daniel Awow Chuang, has announced the country’s readiness to host its first oil and gas bidding round in March 2020.
South Sudan’s decision to open its oil bids to international companies, while undertaking environmental audit will help control oil pollution which has led to children being born with deformities in the northern oil-producing regions. It will also be a means to help speed up South Sudan’s economic recovery, according to Ventures Africa report.
According to the minister, the current data collection which is done by the Ministry of Petroleum provides a platform for investors to invest in the oil sector. It will also add more value to the country’s national resources.
“This licensing round will not just be given, the companies have to compete, and for us, we have to get the best at the end of the day. There are a number of companies that have expressed interest, and in March we will evaluate each,” he said.
In August 2019, South Sudan made a discovery in the Adar oil field in Block 3, containing more than 37 million barrels of recoverable oil. Currently, South Sudan is only exploring 10 to 11 percent of its oil fields, leaving 89 to 90 percent unexplored.
Nonetheless, in January, the government said it will enhance environmental audit before oil exploration and drilling, adding that understanding the extent of pollution will allow the country to put systems in place to prevent further damage as the young nation looks to increase production.
The aim is to get the best companies to undertake research that will tell the amount of damage caused in the oil-producing areas and what caused the damage. The proposed environmental audit will help South Sudan locate exactly what areas have been contaminated and enable the government to provide solutions. It will also encourage licensed exploration of untapped oil in the country, Ventures Africa report.
South Sudan is on a deadline to form a transitional government this month. A timely formation of the new government will help raise the interest of international oil investors and services companies to enter the country’s oil and gas sector.
South Sudan also has to make efforts to remove itself from the United States sanctions list by tackling corruption and human rights issues in the country. This would help potential investors feel safe about tapping into opportunities in the oil blessed country.
The World Bank report shows that South Sudan is the most oil-dependent nation in the world, with oil accounting for almost all of its exports and around 60 percent of its gross domestic product.