South Sudan Will Quit OPEC If They Block Increased Oil Production – Machar Warns

South Sudanese First Vice President Dr. Riek Machar warned on Tuesday that South Sudan may quit Organization of the Petroleum Exporting Countries (OPEC), if its planned increase of production is blocked.

Machar said the country plans to increase its crude production to 2 million barrels per day. But OPEC, a network of oil-producing and exporting states will need to give a green light.

“We want to increase our production. We have discussed this in the last two council of ministers meeting,” he said on Tuesday during the opening of 5th Oil and Energy Conference Juba.

“And the emphasis is, when can we increase our oil production because those who have driven on the two roads found the importance of having connectivity by land, so we want to increase our production.”

South Sudan increased its oil production from 148 thousand barrels/day in 2015 to 170 thousand barrels/day in 2020.

However, the outbreak of COVID-19 had negatively impacted the market as the lock-down imposed by governments influenced the market.

In July 2020, the Ministry of petroleum said the country’s oil production has dropped by 20,000 barrels per day to 170,000 b/d because of the impact of surging coronavirus cases, which led to disruptions in operations at oil fields.

The hindrances to boosting oil productivity are also linked with the instability caused by the civil war and high volatility of oil prices.

Meanwhile, another factor is the production limit imposed on oil producing countries by the OPEC cartel.

Many of the largest oil-producing countries in the world are part of the Organization of the Petroleum Exporting Countries.

In 2016, OPEC allied with other top non-OPEC oil-exporting nations formed another entity named OPEC+ or OPEC Plus, to which South Sudan is a member of.

The cartel’s goal is to exert control over 50% of the global crude oil supplies and about 90% of oil reserves, in order to ensure that oil demand is increased and price is kept high by limiting production.

First Vice President Machar demanded that the Petroleum Minister push with OPEC colleagues for a deal of increased oil production, or else the country will pull out from the international oil cartel.

went on to say this will help the government fund road projects to improve inter-state connectivity across the country.

“One time I had a discussion with him (Puot Kang) and he said had issues with OPEC, I hope you don’t have any issues with OPEC anymore,” said Machar.

“If we decide and some of these gentlemen (investors) decide to invest in oil sector, we have to increase our production to two million. And I hope you will not have problem with OPEC and if you have a problem we will ask you can you quite its membership.”

Koch Madut