Unity in Oil is the Way to Go
By Hon. Amb. Ezekiel Lol Gatkuoth, Minister of Petroleum of the Republic of South Sudan
A strong economy is key to creating a strong society. It is vital for ensuring peace. For many countries in Africa and in the world, natural resources provide a valuable foundation for economic development, growth and even diversification.
The Republic of South Sudan is certainly one of these nations — blessed with vast oil and gas resources, likely much more than we are even currently aware, with more than 3.7 billion proved barrels of oil though most of our country is as of yet unexplored. As the youngest nation in Africa with an immature economy, our development is heavily dependent on oil.
When the oil price crash of 2014 hit, South Sudan suffered with the other oil-dependent countries in Africa and in the world. Economic growth slowed as production decreased, projects were delayed, and jobs were lost. The crash sent shockwaves around the world and prompted unprecedented cooperation on the international stage, as billions of dollars in investment were deferred.
The deal brokered by the Organization of the Petroleum Exporting Countries to reduce daily oil production was the turning point — restoring market stability. The deal was truly historic, as OPEC and major oil producers agreed that just the impressive power of OPEC alone would not have been effective without the cooperation of non-member states.
Recognizing that the stability of the markets and global oil price is key to the prosperity of our own country, the Republic of South Sudan was proud to participate in the deal as one of 10 non-OPEC member states signing on to the oil production cuts. The collaboration with OPEC and non-OPEC members was key to arresting the decline of oil prices and bringing new hope to oil producing countries in Africa. For our part, we cut 8,000 barrels of oil per day from our own production, contributing to a total reduction of 1.76 million barrels per day from the market.
Through this cooperation, we made a positive impact on the oil and gas market for our own country, for our African neighbors, and for global producers. In fact, we believe the 2016 Declaration of Cooperation was instrumental to restoring oil prices, even rescuing the industry from a potential collapse.
Now, thanks to the historic deal, we are witnessing a true market recovery. The oil price has stabilized, and the industry is rebounding — projects are moving forward, African economies are experiencing growth again and jobs are returning. For South Sudan, the recovery is having an immediate impact, and we are capitalizing on improvements in security and resuming oil production at mature fields.
But we know that, for our oil industry to succeed, continued collaboration must be a top priority. We already have agreements in place with other African countries, including an agreement with Equatorial Guinea to cooperate in the areas of gas monetization and local content development and with Sudan in the development of oil resources. On an international level, long-term cooperation is necessary to achieve continued market stability. Even after the production cuts are no longer necessary, these strategic partnerships can and should continue to monitor and influence the market conditions.
This cooperation — both intra-African support and international coordination — are at the top of the agenda for South Sudan. We aim to work with our partners, from our East African neighbors to our new partners in OPEC. We understand that our prosperity depends on unity in the oil and gas industry and our global partnerships.