Additional oil exports are expected to start up in South Sudan within a month, following a landmark peace deal between the government and rebel leaders. The ceasefire agreement and power-sharing deal was signed by South Sudanese President Salva Kiir and his opponent, the rebel leader, and former vice president, Riek Machar. This should bring an end to a five-year civil war that has killed tens of thousands of people.
An estimated quarter of South Sudan’s population of 12 million has also been displaced by the war, which erupted in December 2013.
The peace deal was signed in Khartoum on August 5, brokered by Sudanese President Omar al-Bashir, who said that oil would be pumped from South Sudan’s Wahda region to Sudan beginning September 1. Wahda is another name for Unity State, home to Block 5A and Blocks 1, 2 and 4, which had productive capacity of around 140,000 bpd.
Bashir also said the two countries were working together to rehabilitate production facilities and will conduct joint security patrols to protect oilfields and other installations. South Sudan became independent from Sudan in 2011, but two years into its existence, the civil war began, fuelled by personal and ethnic rivalries. South Sudan was producing about 350,000 bpd of oil on independence.
The peace deal will restore Machar as president Kiir’s deputy, among other power-sharing measures.
In addition to the human cost, the conflict has also ruined an economy that relies heavily on oil. “One of our goals is the need to save the economy of South Sudan because it has reached a level of collapse,” Bashir said on Sudan State TV.
According to the World Bank, South Sudan is the most oil-dependent country in the world, with oil accounting for almost the totality of its exports, and around 60% of GDP. Amid the celebratory mood at the weekend, and the promise of a restart to oil exports, there is still a long way to go before South Sudan can reach its former production levels.
Moreover, previous peace agreements have held for only a few months before fighting has resumed. The economic situation is now more dire, which may force the two sides of the South Sudanese divide to hold to the ceasefire, but the long-term problems have not been resolved.