ENERGY COUNTRY REVIEW Sudan
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ENERGY COUNTRY REVIEW Sudan keyfactsenergy.com KEYFACTS Energy Country Review Sudan Most of Sudan's and South Sudan's proved reserves of oil and natural gas are located in the Muglad and Melut Basins, which extend into both countries. Natural gas associated with oil production is flared or reinjected into wells to improve oil output rates. Neither country currently produces or consumes dry natural gas. In Sudan, the Ministry of Finance and National Economy (MOFNE) regulates domestic refining operations and oil imports. The Sudanese Petroleum Corporation (SPC), an arm of the Ministry of Petroleum, is responsible for exploration, production, and distribution of crude oil and petroleum products in accordance with regulations set by the MOFNE. The SPC purchases crude oil at a subsidized cost from MOFNE and the China National Petroleum Corporation (CNPC). The Sudan National Petroleum Corporation (Sudapet) is the national oil company in Sudan. History Sudan (the Republic of the Sudan) is bordered by Egypt (north), the Red Sea, Eritrea, and Ethiopia (east), South Sudan (south), the Central African Republic (southwest), Chad (west) and Libya (northwest). People lived in the Nile valley over 10,000 years ago. Rule by Egypt was replaced by the Nubian Kingdom of Kush in 1700 BC, persisting until 400 AD when Sudan became an outpost of the Byzantine empire. During the 16th century the Funj people, migrating from the south, dominated until 1821 when Egypt, under the Ottomans, Country Key Facts Official name: Republic of the Sudan Capital: Khartoum Population: 42,089,084 (2019) Area: 1.86 million square kilometers Form of government: Presidential Democratic Republic Language: Arabic, English Religion Sunni Muslim, small Christian minority Currency: Sudanese pound Calling code: +249 KEYFACTS Energy Country Review Sudan invaded. In 1885 the Islamist Mahdi (Ansar) people wrested control, expanding into neighbouring countries until defeated in the 1890s. They were finally subdued by the UK in the 1898 Battle of Omdurman. The north and south were then run separately and prevented from uniting with Egypt. In 1956 UK and Egypt agreed to an independent united Sudan. However the new government was unstable with repeated coups and a civil war between the north and south. Persecution of non-Arabs occurred, especially during the War in Darfur in the east. In 2006 a peace agreement was signed but sporadic fighting continues along the South Sudan border which gained independence in 2011. After losing most of its oil, the country’s economy is growing with investment from China. Geography North Sudan comprises flat plains, broken by a few mountain ranges. In the west the Deriba Caldera at 3,042m in the Marrah Mountains, is the highest point. In the east are the Red Sea Hills. The Blue and White Nile rivers meet in Khartoum to form the Nile, which flows northwards through Egypt to the Mediterranean. There are several dams on the rivers and rich mineral resources are present in the mountains. The original Sudan began producing oil in 1993 from a number of fields in the central Muglad Basin which is part of the East African rift. New discoveries and developments led to increasing output from this region. After separating from South Sudan in 2011 (after a protracted civil war) the former country of Sudan, which was run from the north, lost over three-quarters of the oil. There remains a dispute over the region of Abyei. Source: GlobalShift Geopolitical Sudan has been involved in several conflicts since its independence in 1956 that have impacted the country's economic development, particularly its natural resources. The most recent conflict, Darfur (2003-2010), brought with it international condemnation, internally displaced populations, and sanctions affecting the country as a KEYFACTS Energy Country Review Sudan whole. The conflict has prevented oil exploration in the Darfur region, and the sanctions have prevented some international investment. The fighting itself has led to considerable infrastructure damage further limiting development. The longest of the two wars was between the Northern Sudanese government in Khartoum and the government of the South (1956-1972 and 1983-2005). The North/ South civil war ended with the signing of the Comprehensive Peace Agreement (CPA) that was in place from 2005 through 2011. As part of the CPA, a referendum took place in January of 2011 during which the people of South Sudan voted to secede from the North and in July 2011, Sudan became two countries: Sudan and the Republic of South Sudan. Abyei, a significant oil producing region on the North/South border was also expected to carry out a referendum to determine which side it would join, but this did not take place and uncertainties regarding the status of Abyei remain. Other territorial disputes along the North/South border continue, specifically in the areas of South Kordofan and Blue Nile where clashes have taken place. Oil plays a major role in the economy of both Sudans. According to the International Monetary Fund, oil represented over half of government revenue and 90 percent of export earnings for North Sudan. For South Sudan, oil represented 98 percent of total revenues. Under the CPA, South Sudan was given some degree of autonomy from the North but revenues from oil produced in South Sudan were shared equally. Most of Sudan's oil is produced in what is now the South (about 75 percent, depending on specific field allocations), but the entire pipeline, refining and export infrastructure is in the North. In the near-term, both countries will remain co- dependent in terms of the oil industry. The loss of oil revenues will have a serious impact on the economy of North Sudan at a time when it is still facing international sanctions - while land-locked South Sudan is dependent on the North to export its crude. KEYFACTS Energy Country Review Sudan Proved oil reserves at 2017 year end (billion bbls) Algeria (12.2) Angola (9.5) Chad (1.5) Congo (brazzaville) (1.6) Egypt (3.3) Equatorial Guinea (1.1) Gabon (2.0) Libya (48.4) Nigeria (37.5) South Sudan (3.5) Sudan (1.5) Tunisia (0.4) 2017 Oil production (thousand bbls per day) Algeria (1540) Angola (1674) Chad (103) Congo (brazzaville) (291) Egypt (660) Equatorial Guinea (199) Gabon (200) Libya (865) Nigeria (1988) South Sudan (109) Sudan (86) Tunisia (63) Source: BP Statistical Review KEYFACTS Energy.