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      • South Sudan to build its first oil refinery in Warrap state

South Sudan to build its first oil refinery in Warrap state

The semi-autonomous region of Southern Sudan has embarked on building its first ever oil refinery in Warrap state for its huge oil reserves as the clock ticks towards referendum on secession in January 2011.

Sudan currently produces more than 600,000 barrels of crude oil per day which bring tens of millions of US dollars on daily basis from the international market. Most of the Sudan’s oil is produced from the oilfields located in Southern Sudan while the current country’s refineries are all located in Northern Sudan.

98% of Southern Sudan’s overall revenues that constitute the annual budgets for the region come from the 50% share of the oil produced in Upper Nile and Unity states in accordance with the 2005’s peace deal between North and South.

In its Friday meeting chaired by the Vice President Dr. Riek Machar Teny, the Council of Ministers passed a resolution on the project for building the oil refinery in Southern Sudan that will be located in a place called Akon in North-western Gogrial area of Warrap state.

The project was initiated and presented to the cabinet meeting by the Minister of Energy and Mining, John Luk Jok.

The huge refinery project which is expected to take about three years to complete from the date it kicks off at the construction site will begin by establishing a Joint Venture Company (JVC) with any oil companies interested to partner with the government, finding financiers to fund the project and then JVC finally signing a contract with a national or international company that will implement the project on the ground.

According to a press statement by the official spokesperson and Minister of Information and Broadcasting, Paul Mayom Akech, the crude oil that is targeted for refinery will be extracted from Block 5A oilfield in Unity state.

To transport the crude oil to Akon refinery site, Minister Mayom explained that the Company will also construct a pipeline of some hundreds of kilometers long from the Unity state oilfield.

Mayom said the Government of Southern Sudan will have the biggest share in the $10 million worth JVC ownership body and the share will be represented by the Southern Sudan indigenous Nilepet oil company.

After formation of the JVC and securing of funds, the Company would then advertise the project to any interested national and international companies that would be subjected to competitive bidding process and out of which a winner will sign a contract with the JVC to technically implement the project on the ground.

Tens of thousands of indigenous people of Southern Sudan are expected to benefit from the project as they will be employed to do most of the labor work at the construction sites.

The cost for implementing such an expensive single project is not yet known, but may run into billions of dollars.

The Council of Ministers also directed the Minister of Energy and Mining to discuss the possibility of building refineries at the sites of the oilfields in Upper Nile and Unity states with any major oil companies that may be interested.

The semi-autonomous region earlier resolved to also embark on a separate project to build an alternative pipeline from Southern Sudan to Port Mombassa in Kenya for transporting the crude oil to the international markets.Currently the crude oil from Southern Sudan is being transported to the international market via Port Sudan in the far North-eastern part of the country through the thousands of kilometers long Chinese-constructed pipeline.

Mayom said the Government stressed the importance of indigenizing the operations of the oil sector so that “Southern Sudan is not caught up” in case it chooses secession in 2011.

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