Background Reference: Sudan and South Sudan

Last Updated: November 7, 2019   Notes  |   PDF

This is the map of Sudan and South Sudan

Overview

Sudan has experienced two civil wars since gaining independence in 1956. The second civil war ended with the help of international observers and led to the Comprehensive Peace Agreement (CPA) between the Sudanese government and the rebel factions in the southern region in 2005. The CPA established guidelines for oil revenue sharing and a timeframe to hold a referendum for independence of the South. The southern region overwhelmingly voted for secession, and in July 2011, South Sudan became an independent nation-state separate from Sudan, with Juba and Khartoum as their respective capitals.[1]

The unified Sudan began producing oil in 1999, and as a result, the country tripled its per capita income within a decade.[2] However, the secession of South Sudan significantly affected Sudan’s economy because it lost 75% of its oil reserve fields to South Sudan. Sudan and South Sudan’s oil sectors play a vital role in their economies and are closely linked; most of their producing assets are near or extend across their shared border. Since the split, Sudan and South Sudan’s oil production has declined because of continued domestic political instability and conflict between the two countries.

Disruptions in oil production, disputes over oil revenue sharing, and lower oil prices have had a negative effect on both economies. In January 2012, South Sudan announced that it would shut its oil production over a dispute about oil transit fees. The dispute later turned violent, as the South Sudanese army—the Sudan People’s Liberation Army (SPLA)—and Sudanese opposition forces took control of the oil field for more than a week and destroyed critical infrastructure, which temporarily reduced Sudan’s oil production by more than 50%. The conflict was resolved in November 2012 with support from the international community, and both governments reached an agreement on oil transit fees and on compensation for lost production.[3]

The cooperation agreements and implementation matrix, which states the timeframe to carry out the obligations stipulated in the cooperation agreements, paved the way for restarting oil production in April 2013. According to a Business Monitor Intelligence (BMI) Research report, South Sudan currently pays Sudan U.S. $24.50/barrel, which consists of a U.S. $9.50/barrel transit fee and a U.S. $15/barrel fee to cover the cost of debt repayment shared between the two countries.[4] The drop of oil prices in 2014, however, significantly lowered export revenues. Because South Sudan’s Dar blend trades at a significant discount to Brent, a drop in the price of Brent could significantly affect South Sudan’s fiscal position.[5]

Armed conflict in both countries has persisted in the post-referendum period because unresolved issues on domestic and interstate relations still linger. Both countries still contest some areas around the demarcated border the CPA established. Disputes over the Abyei area and the Heglig oil field between South Kordofan state in Sudan and the Unity State in South Sudan have been particularly contentious because these areas have strategic importance for the oil sector and have agricultural resources that both countries rely on, adding another layer of complexity to the disputes.[6]

Sector organization

In Sudan, two main entities oversee activities in Sudan’s petroleum sector. The Ministry of Petroleum (MOP) administers and manages the Sudanese oil sector. Sudapet, the national oil company, holds minority stakes in each of the international consortia operating in the oil-producing blocks.[7]

In South Sudan, the administrative structure largely mirrors Sudan’s. The Ministry of Petroleum and Mining is responsible for managing South Sudan’s petroleum sector. The National Petroleum and Gas Corporation (NPGC) is the main policymaking and supervisory body, and it reports directly to the president and national legislative assembly. It participates in all segments of the hydrocarbon sector and approves petroleum agreements on the government’s behalf. The Nile Petroleum Corporation (Nilepet) is South Sudan’s national oil company, and its activities mirror much of the responsibilities of its Sudanese counterpart. Nilepet oversees operations in the petroleum sector, and because of its limited technical expertise and financial resources, it holds minority stakes in production-sharing contracts with foreign oil companies.[8] South Sudan’s Transitional Constitution, the 2012 Petroleum Act, and the 2013 Petroleum Revenue Management Act define the regulatory framework governing the hydrocarbon sector.[9]

Petroleum and other liquids

Exploration and production

Most crude oil in Sudan and South Sudan is produced in the Muglad and Melut basins. South Sudan’s secession in 2011 substantially reduced Sudan’s oil production capabilities because most of the oil fields are located in South Sudan. Sudan and South Sudan produce three crude oil blends: Dar, Nile, and Fula. The Dar blend (25.0° API gravity, 0.11% sulfur) is a heavy paraffinic type of crude oil that has a high acid content and must be heated during transport to avoid congealing in ship tanks.[10] The Dar blend is produced at Blocks 3 and 7 in the Melut Basin, which is controlled by South Sudan.[11] The Nile blend (33.9° API gravity, 0.06% sulfur) is produced in the Muglad Basin at Blocks 1, 2, 4, and 5A; it is a medium, low-sulfur waxy crude oil and is a more attractive blend to refiners because of its high fuel and gasoil yields.[12] The Fula blend is a highly acidic crude oil that is produced in the Muglad Basin at Block 6 and is processed for domestic use.[13]

In South Sudan, the ongoing civil war and political instability have undermined its ability to increase output to peak production capacity. Low investor confidence and the poor security situation pose serious obstacles to the government’s ability to boost crude oil production, and they may need to rely on privately negotiated deals with smaller companies such as Nigeria-based Oranto, which secured a 90% stake in Block B3.[14]

Damaged infrastructure and shut-in fields stemming from conflict have lowered overall production levels, and efforts to repair infrastructure or restart production have been delayed. In 2018, combined production from both countries fell to less than half of the peak production levels of 2010; the unified Sudan produced about 486,000 b/d.[15] Neither country will likely be able to substantially increase production without significantly improving the security situation or increasing foreign investment.

Sudan brought two small oil fields in Blocks 6 and 17 online at the end of 2012, and the country is exploring offshore production in the Red Sea Basin. However, progress in developing the Red Sea Basin area has been slow.[16] In addition, Sudan’s oil fields are reaching maturity and so nearing depletion. Sudan is trying to mitigate declining output by using enhanced oil recovery (EOR) techniques, but EIA expects the decline to continue.[17]

Table 1: Sudan’s and South Sudan’s major oil fields and operators
Country Location Main fields Blend Operator
Sudan Block 2a, 2b Block 2a, 2b Nile GNPOC
Block 4 Diffra, Neem Nile GNPOC
Block 6 Fula, Hadida Fula PEOC
Block 17 al-Barasaya Unknown Sudapet
Block 25 Rawat Central, Wateesh Unknown Sudapet
South Sudan Block 1, 2, 4 Unity, Toma, Munga, Heglig, Bamboo, Diffra, Neem Nile GPOC40
Block 3, 7 Palogue, Adar-Yale Dar DPOC
Block 5A Mala, Thar Jath Nile SPOC
Source: Company websites and presentations, RYSTAD Energy, Africa Oil & Power

Midstream infrastructure

Sudan has two main export pipelines that travel north across the country to the Bashayer Marine Terminal, located about 15 miles south of Port Sudan. Most of Sudan’s storage facilities for crude oil and refined products are also located at the Bashayer Marine Terminal. The Bashayer Marine Terminal has a storage facility with a capacity of 2.5 million b/d and an export/import facility with a handling capacity of 1.2 million b/d. The Greater Nile Petroleum Operating Company (GNPOC) operates the terminal. South Sudan currently does not have any significant storage capacity. South Sudan exports all of its crude oil via pipeline through Sudan.

The Petrodar (PDOC) pipeline transports crude oil from Palogue and Adar Yale oil fields (Blocks 3E and 7E) in the Melut Basin to the Bashayer Marine Terminal in Port Sudan. The pipeline has several heating units to facilitate the movement of the Dar blend crude oil along the pipeline.[18]

The GNPOC pipeline transports Nile blend crude oil from the Heglig oil fields (Blocks 2 and 4) in Sudan and the Thar Jath and Mala oil fields (Block 1 and 5A) in South Sudan to the Bashayer Marine Terminal in Port Sudan for export and to two refineries in El-Obeid and Khartoum for refining and distribution to the domestic market. In September 2014, ownership of the pipeline and facilities was fully transferred to a local Sudanese pipeline operator, Petrolines for Crude Oil Ltd. (PETCO).[20]

Table 2: Crude oil pipelines in Sudan and South Sudan
Operator Start of pipeline Destination Crude oil blend type Approx. length (miles) Design capacity (thousand b/d)
Main crude oil pipelines
DPOC Block 3 and 7 Bashayer Terminal 2, Port Sudan Dar 850 500
GNPOC Heglig facilities Bashayer Terminal 1, Port Sudan Nile 1000 450
SPOC Block 5A Connects to Heglig facilities Nile 60 200
CNPC Block 6 Khartoum Refinery Fula 450 200
Proposed crude oil pipelines
-- South Sudan Lamu (Kenya) -- -- 450
-- South Sudan Djibouti via Ethiopia -- -- --
Source: Company websites and presentations, Middle East Economic Survey

Refining and refined oil products

South Sudan has no domestic refining capacity so it must rely on imported petroleum products to meet domestic demand. The South Sudanese government has sought to accelerate the development of two refineries in Bentiu and Tangrial; however, the poor security environment has impeded the development of downstream infrastructure.

Sudan has two oil refineries and three topping plants (smaller, less complex refineries). However, the only active refineries are the Khartoum (al-Jaili) refinery and the El-Obeid topping plant.[21] The al-Jaili refinery, located approximately 45 miles north of Khartoum, is the country’s largest, with a capacity of 100,000 b/d. The other full-conversion refinery is the Port Sudan refinery (21,700 b/d), and the three topping plants are El-Obeid (10,000 b/d), Shajirah (10,000 b/d), and Abu Gabra (2,000 b/d).[22]

The al-Jaili refinery initially came online in 2000 with a capacity of 50,000 b/d and was a 50/50 joint venture between the Ministry of Energy and Mining (MEM) and the China National Petroleum Corporation (CNPC). Al-Jaili was later expanded in 2006, increasing total capacity to 100,000 b/d and creating two production lines that can refine both Nile and Fula blend crude oils. The expansion was notable for using the world’s first delayed-coking unit, a unit required to process Fula crude oil because of its high acid and calcium content.

Table 3: Oil refineries in Sudan and South Sudan
Country Refinery Capacity (thousand b/d) Status Operator
Sudan Khartoum (al-Jaili) 100 Operational CNPC/Sudapet
Port Sudan 21.7 Not operating Sudapet
El Obeid 10 Operational Sudapet
Shajirah 10 Not operating Concorp
Abu Gabra 2 Not operating Sudapet
Planned Refineries Operator and/or builder
South Sudan Unity State (Bentiu) 5 Under construction Safinat (Russia)/Nilepet
Upper Nile (Tangrial) 10 Suspended Government of South Sudan
Proposed Refineries
Sudan Port Sudan 100 -- --
Khartoum (expansion) 100 -- --
South Sudan Akon 50 -- Akon Refinery Company
Gameza 100 -- --
Source: BMI Research, African Development Bank
Note: Contruction at the Bentiu refinery in South Sudan initially was to build facilities with a capacity to process 3,000 b/d. Plans for expansion to increase capacity to 5,000 b/d have been discussed, but no progress has been made.

Petroleum and other liquid fuels exports

Sudan and South Sudan export the Nile and Dar blends to Asian markets. All crude oil produced in South Sudan is exported via pipeline to Sudan for refining or export because South Sudan has no refining capacity, and Sudan is the only country in the region with the refining infrastructure capable of processing these particular blends.[23] Crude oil is exported from Port Sudan to Asia via the Bab el-Mandeb Strait. Given the lack of alternative transit routes, Bab el-Mandeb is a strategically important chokepoint that if blocked or closed could lead to significant increases in shipping time and costs.[24]

Natural gas

Neither Sudan nor South Sudan produces natural gas for commercial use or domestic consumption. Natural gas in Sudan is mostly flared or re-injected into associated oil fields.

Energy Consumption

Domestic consumption of petroleum products grew rapidly with increased industrialization, car ownership, and access to electricity in the 2000s; however, the persistent instability in both states has dampened consumption. Lower production levels during the past few years have led to an increase of imported petroleum products to meet shortfalls in domestic demand, which had been traditionally met by domestically refined crude oil.

Electricity

Sudan has two interconnected grids, the Blue Nile and Western grids, which cover a small portion of the country. An additional 14 centers receive service from thermal generators and local distribution networks.[25] The Sudanese government is attempting to diversify its power generation mix by focusing on developing conventional thermal plants to meet domestic energy demand. However, the proposed projects are still in their early stages and rely heavily on Saudi financing. Without diversifying its power generation mix, Sudan must rely heavily on hydropower to meet domestic demand, and it will be especially vulnerable to weather patterns such as a severe or sustained drought.

South Sudan has one of the lowest electrification rates in the world. Those connected to the power network experience frequent blackouts or forced load shedding, making citizens rely on standby generators to meet energy needs.[26]

Renewable Energy Sources

Hydroelectricity

Hydroelectricity is generated from seven dams: Roseires, Sinnar, Jebel Aulia, Khashm el-Girba, Merowe, Rumela, and Burdana. The Rumela and Burdana dams, located on the Upper Atbara and Setit rivers in eastern Sudan, were brought online in 2017 and are the most recent additions in hydropower generation. According to BMI Research, the two dams added 320 megawatts (MW) and 15 MW to total generation capacity, respectively.[27]

Notes

  • In response to stakeholder feedback, the U.S. Energy Information Administration has revised the format of the Country Analysis Briefs. As of December 2018, updated briefs are available in two complementary formats: the Country Analysis Executive Summary provides an overview of recent developments in a country's energy sector, and the Background Reference provides historical context. Archived versions will remain available in the original format.
  • Data presented in the text are the most recent available as of September 26, 2019.
  • Data are EIA estimates unless otherwise noted.

Endnotes

  1. U.S. Relations with Sudan,” U.S. Department of State, Bureau of African Affairs U.S. Bilateral Relations Fact Sheet, Match 31, 2017, accessed 12/26/2017. Also, “The Sudan–South Sudan Agreements: A Long Way to Go,” Conflict Risk Network, United to End Genocide, October 2012.
  2. IMF Country Report No. 16/324, July 25, 2016, pg. 5, accessed 1/10/2018.
  3. Steven Spittaels and Yannick Weyns. “Mapping Conflict Motives: the Sudan–South Sudan Border,” International Peace Information Service, January 2014, pg. 53.
  4. “Sudan & South Sudan Oil & Gas Report Q4 2017,” BMI Research, July 2017, pg. 20.
  5. “Sudan & South Sudan Oil & Gas Report Q3 2017,” BMI Research, April 2017, pg. 21. Also, see “South Sudan Oil Revenues Collapse,” Middle East Economic Survey, Vol. 59, issue 09, 2/12/2016, accessed 12/4/2017; and “Oil Price Slide Exposes Flaws in Juba-Khartoum Transit Fee Deal,” Middle East Economic Survey, Vol. 58, issue 02, 3/4/2016, accessed 12/4/2017.
  6. Abyei: Simmering Tensions Show No Signs of Abating,” ReliefWeb, July 27, 2017, accessed 10/2/2017. Also, Joshua Craze. “Contested Borders: Continuing Tensions over the Sudan-South Sudan Border,” Small Arms Survey, HSBA working paper No. 34, November 2014, pg. 15–17, 40–50.
  7. Laura M. James. “Fields of Control: Oil and (In)security in Sudan and South Sudan,” Small Arms Survey, HSBA working paper 40, November 2015, pg. 17. Also, see Republic of Sudan, Ministry of Petroleum & Gas, accessed 11/7/2017.
  8. Petroleum Act, Laws of South Sudan, Ch. II–V, 2012. Also, Laura M. James. “Fields of Control: Oil and (In)security in Sudan and South Sudan,” Small Arms Survey, HSBA working paper 40, November 2015, pg. 18.
  9. David K. Deng. “Oil and Sustainable Peace in South Sudan,” South Sudan Law Society working paper, February 2015, pg. 3–5, accessed 10/27/2017.
  10. “Sudan’s Oil Industry, Facts and Analysis,” Fatal Transactions and European Coalition on Oil in Sudan, April 2008, pg. 29.
  11. “Country Profile–The Leading Oil Exporters: Sudan,” Energy Intelligence, accessed 10/10/2017.
  12. “Crude Oil Profile–Sudan: Nile Blend,” Energy Intelligence, accessed 10/10/2017.
  13. Angelia Sanders. “Sudan and South Sudan’s Oil Industries: Growing Political Tensions,” Civil-Military Fusion Centre, May 2012, accessed 12/11/2017.
  14. State Department cables. Also, “South Sudan Looks Beyond Total for Block B,” Middle East Economic Survey, Vol. 60, Issue 18, May 5, 2017, accessed 10/23/2017.
  15. U.S. Energy Information Administration, International Energy Statistics Database.
  16. Assessment of Undiscovered Oil and Gas Resources of the Red Sea Basin Province,” U.S. Geological Survey, December 2010, accessed 10/20/2017. Also, Abdelghani Henni, “Red Sea: The Middle East’s Untapped Oil, Gas Region,” E&P Magazine, May 19, 2017, accessed 10/20/2017. “Sudan & South Sudan Power Report Q4 2017,” BMI Research, August 2017, pg. 13, 17.
  17. “Sudan & South Sudan Power Report Q4 2017,” BMI Research, August 2017, pg. 17.
  18. “Sudan & South Sudan Oil & Gas Report Q4 2017,” BMI Research, July 2017, pg. 53–54.
  19. Pipeline System, Petrodar Operating Company, accessed 12/26/2017. Also, Dr. Mohamed Zayed Awad. “Local Content in the Petroleum Sector in the Republic of the Sudan,” presentation at 17th Africa OILGASMINE, November 23–26, 2015, accessed 12/26/2017.
  20. Dr. Mohamed Zayed Awad. “Local Content in the Petroleum Sector in the Republic of the Sudan,” presentation at 17th Africa OILGASMINE, November 23–26, 2015, accessed 12/8/2017. Also, see Pipeline System, Greater Nile Petroleum Operating Company, accessed 12/8/20178; and PETCO Services, Petrolines for Crude Oil Ltd., accessed 12/8/2017.
  21. IHS Markit Global Refineries Database, interviews with IHS Markit analysts.
  22. “Sudan & South Sudan Power Report Q4 2017,” BMI Research, August 2017, pg. 21.
  23. Interview with Department of State official.
  24. U.S. Energy Information Administration, “World Oil Transit Chokepoints,” July 25, 2017. Lejla Villar, Mason Hamilton, “Three Important Oil Trade Chokepoints are Located around the Arabian Peninsula,” Today in Energy, August 4, 2017, accessed 1/29/2018.
  25. Voltage in Sudan,” Ashley-Edison.com, accessed 12/21/2017.
  26. The African Development Bank. “Juba Power Distribution System Rehabilitation and Expansion Project—Appraisal Report,” December 2013, accessed 12/5/2017, pg. 1, accessed 12/5/2017.
  27. “Sudan & South Sudan Power Report Q4 2017,” BMI Research, August 2017, pg. 11. Gregory B. Poindexter. “Sudan Inaugurates U.S. $1.9 Billion Upper Atbara and Setit Dam Hydropower Project,” www.hydroworld.com, February 2, 2017, accessed 1/26/2018. “Twin Dam in Eastern Sudan: Rumela Dam on Upper Atbara and Burdana Dam on Setit,” Preserve the Middle Nile (blog), April 24, 2012, accessed 1/26/2018. “Sudan: Energy Profile,” United Nations Environmental Programme, 2017, accessed 1/26/2018.