The Sudanese Oil & Gas Minister has acknowledged that Sudan’s current oil production has dropped to between 95,000 to 100,000 barrels a day, in the wake of the falling global oil price.
In a report by the Council of States on Monday, Minister Mohamed Awad Zayid said that Sudan’s debt to the China National Petroleum Corporation now amounts to $2 billion, in addition to the government’s debts to the companies he did not name.
He said that production is in the hands of foreign investors, and the government shares the profits with several companies. He pointed out that the oil companies refuse to work in conflict zones. Therefore, when drilling stops because of conflict, it effectively costs the country hundreds of thousands of Dollars a day.
The Minister attributed the current decrease in oil production to the global slump in oil prices, and was careful to underline that it has nothing to do with any decrease in oil reserves.
Last year, Minister Awad announced that 253 new exploratory wells were to be dug this year, to boost the country’s reserves by 65.4 million barrels of oil, and 300 billion cubic feet of gas. He said then that the aim was also to attract foreign investment, and contribute to the settlement of Sudan’s debts.
According to a report by the International Monetary Fund (IMF) on its 2016 Consultation with Sudan, the loss of most of Sudan’s oil export potential has exacerbated the crises in the country.
Sudan as a united country started producing oil in the 1990s, though the division of Sudan and South Sudan in July 2011 left most of the oil fields straddling the new border. The secession of South Sudan resulted in a loss of 80 per cent of Sudan's oil export revenues.
The IMP report asserts that oil still plays an essential role in the economy and policy adjustments in the wake of the birth of South Sudan had reduced inflation and supported recovery to some extent.