By Adedapo Adesanya
South Sudan has threatened to quit the alliance known as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) if the group opposes its ambitious plan to boost crude production to 230,000 barrels per day by 2024.
This was made known by the country’s First Vice President, Mr. Riek Machar, in Juba on Tuesday, saying that South Sudan had struggled with OPEC+ over its crude oil targets.
“Our oil minister has had issues with OPEC over increasing crude production, but we will instead leave the organization if we are prevented from increasing oil production,” Machar said.
“Our goal is to increase crude production now and become an oil hub in the East African region and foster the economic development of our people,” Machar added.
The country has ambitious plans to increase crude oil production to 230,000 barrels per day by 2024. However, the country’s production cap in August, agreed by OPEC+, was significantly lower at 130,000 barrels per day. .
Although one of the smallest producers in the coalition with production of 160,000 barrels per day in August, according to Argus estimates, it has consistently exceeded its agreed OPEC+ quotas.
In an internal report, an OPEC+ technical committee found that South Sudan accounts for about half of the coalition’s oversupply to date. The group has asked its members to make up for past overproduction with further cuts before the current deal expires at the end of the year, but the report shows South Sudan had yet to submit plans compensation at the end of August.
According to reports, South Sudan’s Petroleum Minister, Mr. Puot Kang Chol, said the current production is only 107,000 barrels per day due to “several challenges such as flooding and depletion of oil well”.
Efforts are underway including an environmental audit of all wells to determine ways to increase production without endangering the environment in line with international standards, Chol said.
“With global events in the world, especially the Russian-Ukrainian war, it justifies us to produce more oil,” he added.
Changes within the OPEC+ alliance don’t happen all the time. Qatar was the last country to officially leave the group, effective January 2019. Mexico, which is still part of the group’s production deal, has not been given a quota since July 2020. Sudan du Sud said in October 2020 that it wanted to renegotiate its production quota because production from some blocks had resumed since it first entered the deal.
South Sudan was among 10 countries that joined OPEC+ to form the expanded OPEC+ group in 2017. Others include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman , Russia and Sudan.