The Value of Oil in South Sudan, a Fledgling Country Trying to Recover from Conflict

 

     South Sudan gained independence as a country in 2011. They are the youngest country in the world. Sudan’s second major civil war ended in 2005 with the Comprehensive Peace Agreement (CPA). The southern part of the country voted overwhelmingly to secede, and South Sudan became an independent country in 2011. The CPA established guidelines for oil revenue sharing based on where the oil originated. South Sudan gained 75% of the country’s oil production to Sudan’s 25%. Oil from South Sudan flows through Sudan to ports for export. Sudan collects fees for transporting the oil. According to an EIA analysis of energy in Sudan and South Sudan:

“Since the split, oil production growth in Sudan and South Sudan has stagnated because of insufficient upstream investment and continued domestic political instability in both countries.”

     Unfortunately, a civil war broke out in South Sudan in 2013 with a peace agreement reached in 2018 that remains a bit tenuous. There are also long-standing disputes between Sudan and South Sudan on borders, oil-sharing issues, and other matters. In April 2023, a war broke out in Khartoum, the Sudanese capital city, between the Sudanese Armed Forces (SAF) and the rebel group known as the Rapid Support Forces (RSF). Recently the RSF has been credibly accused of genocide by the U.S. government.

     South Sudan is heavily dependent on oil revenue. Oil accounts for almost all its exports and 90% of government revenue, according to the IMF. 80% of South Sudanese people survive on agriculture and the country is also heavily dependent on humanitarian aid. It is quite clear that oil revenues can really help both of these countries, especially if oil production could increase with more exploration and infrastructure buildouts. Unfortunately, that is not likely in the near term due mainly to ongoing conflict risks. The main pipeline transporting oil from South Sudan and Southern Sudan through Sudan to Port Sudan on the Red Sea where it is exported was damaged in February 2024 and has been shut-in since. It is expected to come back online with partial volumes as early as January 8, 2025. South Sudan was producing about 150,000 barrels of oil per day (BPD) before the pipeline was damaged and is expected to produce 90,000 BPD when it initially comes back on (about 60% of the country’s total oil production). It is unknown whether or when it can return to full production. Some oil still flows for export through other pipelines. South Sudan gets 40% of the revenue while the oil companies that developed it get 60%. The country of 12 million citizens are in dire need as the loss of oil revenue has resulted in many people, mostly government workers, not being paid and has increased the level of poverty in the country. Many are facing starvation in both South Sudan and Sudan. South Sudan is an example where domestic oil development and the revenue it creates can be a key source of revenue for the entire country, especially the government. It is an example showing the value of fossil fuel development and production in warding off poverty and starvation. The loss of that revenue has been catastrophic thus far. However, as in most African countries, there is also corruption. South Sudan’s GDP dropped from about $8 billion in 2022 to a little over $5 billion in 2024 (Elon Musk’s net worth could cover about 82 years of South Sudan’s GDP or one year of 82 countries’ GDPs of a similar amount).

 

SOUTH SUDAN GDP IN CURRENT PRICES (2019-2029) (in billions U.S. dollars)

Source: Statista

 

South Sudan Petroleum Geology

     The Central African Rift System (CARS) bounded on the north by the Central African Shear Zone (CASZ) provides the main geological structure that controls oil accumulation. Oil is sourced from cretaceous-aged shales and produced from Cretaceous-aged sandstones as shown below. Lacustrine shales, claystones, sandstones, and conglomerates fill these very deep basins, some with over 45,000 feet of sediment. The southern part of South Sudan does not have basins for the most part and the surface is Precambrian igneous and metamorphic rocks. Rifting occurred during early deposition so there are syndepositional features and several different trap types. Chevron began exploring these basins in 1975.

 

     A series of north-south oriented rift basins with thick sedimentary sequences host the oil. The most productive basin is the Muglad Basin followed by the Melut Basin. These basins are part of the extensive East Africa Rift System.

     According to a July 2023 study of the Muglad Basin by Mohammed Ahmed Gumaa Mohammed:

“{There were} three major phases of extension with intervening periods when uplift and erosion or non-deposition have taken place. The depositional environment is nonmarine ranging from fluvial to lacustrine. The basin has probably undergone periods of transtensional deformation indicated by the rhomb fault geometry. Changes in plate motions have been recorded in great detail by the stratigraphy and fault geometries within the basin and the contiguous basins. The rift basin has commercial reserve of petroleum, with both Cretaceous and Tertiary petroleum systems active. The major exploration risk is the lateral seal and locally the effect of the tectonic rejuvenation as well as tectonic inversion. In some oilfields, the volcanic rocks constitute a major challenge to seismic imaging and interpretation.”

     A 2012 study in AGES Extracts made the following conclusions about the geology of the Muglad Basin which are similar to those in the more recent analysis by Mohammed:

“Although there are uncertainties in the age of oceanic crust and basinal unconformities, this study has shown at a macro tectonic scale the importance of unconformities as a tectonic correlation tool.  These unconformities are common to all basins in the WCARS, mark changes in the African stress field and can be directly linked to changes in the relative opening of the ocean floor.  The Muglad basin has undergone a polyphase development which has resulted in three major phases of extension with intervening periods (unconformities) when uplift, erosion, non-deposition have taken place.  Evidence from other rift basins within the WCARS infers that the Muglad basin has also undergone periods of shear deformation.  Thus the WCARS can be shown to be intimately connected to regional plate tectonic processes which are recorded in the stratigraphy and fault geometries of the basins.  How the sequence of plate tectonics events links with the stratigraphy and changes in plate motions is complex and is still poorly understood and is a research area that is worthy of further investigation.”

     A July 2023 study in the International Journal of Innovative Science and Research Technology explored the production performance and petroleum resources of the Dar Petroleum Operating Company. Some data from the study report is given below.

     The U.S. Energy Information Administration maintains oil and gas data and analysis  for all countries. Some data for South Sudan are given below:

      A petrophysical and petrographical study of the Muglad Basin was published in March 2021 in Environmental Earth Sciences. Some slides from that study are shown below.

 

References:

 

The promise of oil and gas in South Sudan. Alex Irwin-Hunt and Munyaradzi Makoni FDI Intelligence. October 31, 2022. The promise of oil and gas in South Sudan | fDi Intelligence – Your source for foreign direct investment information - fDiIntelligence.com

South Sudan says will resume oil production from Jan 8. AFP. January 7, 2025. South Sudan says will resume oil production from Jan 8

South Sudan on the brink after oil exports derailed by Sudan’s civil war. Mat Nashed. March 26, 2024. South Sudan on the brink after oil exports derailed by Sudan’s civil war | Salva Kiir News | Al Jazeera

Country Analysis Brief: Sudan and South Sudan. Last Updated: March 20, 2024. Next Update: March 2026. EIA.  Country Analysis Brief: Sudan and South Sudan

As South Sudan’s oil revenues dwindle, even the security forces haven’t been paid in months. Deng Machol. AP World News. August 9, 2024. As South Sudan's oil revenues dwindle, even the security forces haven't been paid in months | AP News

Geology of South Sudan. Wikipedia. Geology of South Sudan - Wikipedia

Rift Basins of Interior Sudan: Petroleum Exploration and Discovery. Thomas J. Schull. AAPG Bulletin. Volume: 72 (1988). Issue: 10. (October). AAPG Datapages/Archives: Rift Basins of Interior Sudan: Petroleum Exploration and Discovery

Petroleum Industry in South Sudan: Evaluation of Production Performance & Petroleum Resources in Dar Petroleum Operating Company. Awow Daniel Chuang. Ministry of Petroleum- Republic of South Sudan. International Journal of Innovative Science and Research Technology. Volume 8, Issue 7, July 2023. IJISRT23JUL699.pdf

Integrated petrophysical and petrographical studies for characterization of reservoirs: a case study of Muglad Basin, North Sudan. Abeer A. Abuhagaza, Marwa Z. El Sawy, and Bassem S. Nabawy.  February 2021. Environmental Earth Sciences. (2021) 80:171. IntegratedpetrophysicalandpetrographicalstudiesforcharacterizationofreservoirsacasestudyofMugladBasinNorthSudan.pdf

Muglad Basin. Wikipedia. Muglad Basin - Wikipedia

Melut Basin. Wikipedia.  Melut Basin - Wikipedia

Regional tectonic controls on basement architecture and oil accumulation within the Muglad basin, Sudan. J. Derek Fairhead, Stanislaw Mazur, Christopher M Green, and Mohamed Elamin Yousif. ASEG Extended Abstracts · December 2012. 22nd International Geophysical Conference and Exhibition, 26-29 February 2012 - Brisbane, Australia. Fairhead_etal_2012.pdf

Discovery of Early Mesozoic Magmatism in the Northern Muglad Basin (Sudan): Assessment of Its Impacts on Basement Reservoir. Jian Zhao, Jian Zhao, and Lirong Dou. Front. Earth Sci., 04 May 2022. Sec. Economic Geology. Volume 10 - 2022 | https://doi.org/10.3389/feart.2022.853082.