South Sudan plans to more than double oil production to 290,000 barrels per day (Mbbl/d) in fiscal year 2017/2018, the finance minister said on Jan. 27, indicating a target higher than the level recorded shortly before conflict erupted in late 2013.
The nation, which seceded from Sudan in 2011 but plunged into civil war just over two years later, aimed to add 160 Mbbl/d to existing output of 130 Mbbl/d in the financial year starting in July, Minister Stephen Dheiu Dau told Reuters.
"The resumption is underway," he said in an interview in the South Sudanese capital, Juba, referring to the plan to increase output. "The conflict has affected the facilities, including the power."
Increased output would provide desperately needed revenues for a government which, since independence, has relied on oil for almost all income, a source that has plummeted as production plunged and international crude prices slid.
Starved of foreign exchange, the South Sudanese pound has plunged in value. Inflation soared to more than 800% per year, and the government--of one of the world's poorest nations--has struggled to pay state workers and soldiers.
The main oil firms involved in South Sudan, which produced about 245 Mbbl/d until fighting flared at the end of 2013, are China National Petroleum Co. (CNPC), Malaysia's state-run Petronas and India's ONGC Videsh.
South Sudanese officials have said in the past that production reached as high as 350 Mbbl/d but fell after a dispute with Sudan over fees for pumping crude through an export pipeline prompted Juba to temporarily halt production in 2012.
Even after crude pumping resumed following that halt, it never fully recovered to those levels. It dropped to 245 Mbbl/d after fighting erupted in 2013, often affecting oil producing areas in the north.
Dau said inflation had slowed to 10% per month, and the government would help the central bank build foreign exchange reserves. He did not give a current level for reserves.
"We will ... reduce the money supply in circulation," he said. "We will stop our borrowing from the central bank, it's one of the causes that led to inflation."
In December, the International Monetary Fund said the government's 2016/2017 budget was "an important step in the right direction", saying it cut the forecast deficit to 9% of GDP from 30% in 2015/2016.
The conflict that has often followed ethnic lines pitted President Salva Kiir, an ethnic Dinka, against his former deputy and longtime political rival Riek Machar, a Nuer. A peace deal signed in 2015 failed to hold, and sporadic fighting has continued even after Machar fled the country in 2016.
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