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South Africa inks oil exploration deal with South Sudan

AFP  |  Juba 

South on Monday signed a deal for the exploration and production of in South Sudan, as part of a USD 1 billion investment in the conflict-torn nation's struggling industry.

The deal will see South Africa's state-owned company, (SFF), and South Sudan's Corporation, explore an area of 31,000 square kilometres (12,000 square miles) known as "Block B2".

South African described the agreement as "a great deal" for both

Exploration will begin immediately, and is expected to continue for six years.

South has an estimated 3.5 billion barrels of oil with only 30 per cent of it being explored, said at the signing ceremony.

The country has the third-largest in sub-Saharan Africa, according to the ministry.

At its peak, in South was at 350,000 barrels a day, however production has been crippled, with severely damaged by almost six years of war.

A September 2018 peace deal has helped revive production, which has gone from around 155,000 barrels per day (bpd) at the end of last year, to current figures of 175,000, said Gatkuoth.

He said the government was aiming to reach 200,000 bpd by the end of 2019.

The oil sector's revival was a key part of the peace deal mediated by Sudan, whose economy also suffered from the slowdown in to the south.

South Sudan's is currently dominated by Chinese and Malaysian oil companies, while companies from and have also signed deals to explore new

South achieved independence from Sudan in 2011, but remained heavily dependent on its northern neighbour's -- refineries and pipelines -- for exports.

The agreement with South is part of a deal signed in November 2018 that will see invest around $1 billion (880 million euros) in the oil industry, money that would go towards building a refinery and pipelines as well as and training of workers and engineers.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, May 06 2019. 20:20 IST