The Sudanese Oil and Gas Minister, Mohamed Awad Zayid, said that the country’s current oil production has dropped to between 95,000 to 100,000b/d, in the wake of the falling global oil price. He added that Sudan’s debt to the China National Petroleum Corporation has reached $2b, All Africa reported.
This came as the Finance Minister, Badr al-Din Mahmoud, announced that Sudan has partially lifted fuel and electricity subsidies as part of an economic reform package aimed at cutting government spending. Gasoline prices are set to increase about 30% while electricity prices are set to increase $0.01/kWh for use above 400kW, informed Reuters.
In 2015 Sudan announced that 253 new exploratory wells were to be dug in 2016, to boost the country’s reserves by 65.4mb of oil, and 300bcf of gas with the aim to attract foreign investment, and contribute to the settlement of Sudan’s debts. However, Zayid explained that production is in the hands of foreign investors, and the government shares the profits with several companies. He pointed out that the oil companies refuse to work in conflict zones. Therefore, when drilling stops because of conflict, it effectively costs the country hundreds of thousands of USD a day. Furthermore, a report by the International Monetary Fund (IMF) on its 2016 Consultation with Sudan stated that the loss of most of Sudan’s oil export potential, due to the independence of South Sudan province, has exacerbated the crises in the country.