OIL & GAS

Shell shows interest in South Sudan
03/21/12, Biodun Omojola

Oil major, Royal Dutch Shell, is said to by looking at oil exploration opportunities in the Republic of South Sudan. Shell's spokespersons said, "We continuously review potential business opportunities around the world. We would like to better understand the current security, political and business environment in South Sudan, and how this has been impacted by the secession." The revelation by Shell is a departure from the norm as the oil company does not usually comment on possible new areas of interest.

South Sudan sits atop 75 percent of Sudan's 500, 000 bpd production. However, being a land-locked country its oil has to go through Sudan to get to the Red Sea for export. Relations between Sudan and South Sudan, even after the July 11 independence, are still sour. Last November, South Sudan accused Khartoum of temporarily blocking the loading of crude. Sudan denies the charge. Khartoum has demanded a tariff for transporting the oil that is10 times higher than the international norm, which is usually calculated per kilometre or per mile.

There are, however, plans to boycott Sudan in transporting South Sudan's oil for export. French oil major Total SA said it had proposed building a pipeline to export South Sudan's oil via Uganda. Another report says Shell was planning to construct an oil pipeline line from the country to Ethiopia. A Shell delegation reportedly visited the new country last November. Analysts doubt whether a pipeline via Ethiopia would be commercial because Ethiopia lacks developed oil infrastructure or a coastline which would allow it direct access to international markets.BO