Sudan Says It Will Not Reach 180,000bpd Oil Target for 2012

Sudanese oil workers inspect burnt out equipment at the field in Heglig on the border with the South. The conflict with the Republic of Sudan has further crippled the South Sudanese economy., a photo by Pan-African News Wire File Photos on Flickr.

Sudan says will not reach 180,000 bpd 2012 oil target

8:41am EDT
By Nidhi Verma

NEW DELHI, Oct 16 (Reuters) - Sudan has managed to restore its oil production to levels before fighting broke out with South Sudan in April but will miss its 2012 target of pumping 180,000 barrels a day, its oil minister said on Tuesday.

The African country is pumping currently 120,000 bpd, roughly what it used to produce when fighting in the oil-producing border region broke out with neighbour South Sudan, Awad Ahmed al-Jaz told reporters at an industry conference in India.

In April, South Sudan briefly occupied the disputed oil field of Heglig which contributed to half of Sudan's output. The field and its processing plant got damaged during days of heavy fighting with ground and air forces.

Jaz said Sudan expected to increase its annual oil production to 180,000 barrels per day (bpd) in the first quarter of 2013, giving up a plan to reach this level by year-end.

"We have our blocks and we are working hard to raise production," he said.

He already said on Monday production is expected to touch 150,000 bpd by the end of this year and Sudan aims to double its oil output in the next two years, to 300,000 bpd, as it steps up oil exploration.

Sudan lost three-quarters of oil production when South Sudan became independent in July 2011, sending its economy in turmoil as oil revenues were the main source for state revenues and dollars needed to fund imports.

In July, Sudan signed oil exploration and production-sharing deals with Canadian firm Statesman Resources Ltd as well as Chinese, Nigerian, Australian, Brazilian and French companies.

Seven blocks were awarded for the first time, while some companies joined previously awarded contracts for two other blocks.

But analysts are sceptical Sudan will increase production anytime soon as companies are expected to carry out for years magnetic studies first. Efforts to boost production from existing fields have been hampered by a scarcity of dollars needed to bring in better equipment and technology.