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Energy Insights: Energy News: OVL shuts down oil operations in South Sudan

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OVL shuts down oil operations in South Sudan


Faced with escalating violence in the world’s youngest nation, Oil and Natural Gas Corporation Videsh Ltd. (OVL) on Thursday announced its decision to shut down operations temporarily in oilfields in South Sudan as a precautionary measure.

In a statement issued in New Delhi, OVL, which has stakes in two oil projects in South Sudan, said it had also evacuated all of its 11 executives working in the African nation. OVL holds 25 per cent stake in the Greater Pioneer Operating Project which produces 37,000 barrels of oil per day (bpd) and 24.125 per cent in Block 5A that produced 4,600 bpd. “Following the deteriorating security situation in the country (South Sudan) from December 15, 2013, the Joint Operating Companies decided to temporarily shut down the operations in their oilfields,” the statement said.

The statement further said the shutdown was executed methodically as per its standard shutdown procedure, ensuring safety of personnel and equipments and smooth resumption of operation immediately after normalisation of the security situation. “Following the shutdown, the production from the oilfields was completely stopped from December 22,” it added.

The Greater Pioneer Operating Company (GPOC) produces close to 37,000 bpd (OVL share 9,250 bpd) from Block 1,2,4 while SUDD Petroleum Operating Company (SPOC), where OVL has 24.125 per cent stake, produces close to 4,600 bpd (OVL share 1,100 bpd) from Block 5A. Other partners in GPOC are China National Petroleum Corporation (CNPC) with 40 per cent stake, Petronas of Malaysia have 30 per cent and Nilepet of South Sudan the remaining 5 per cent. In Block 5A, Petronas has 67.875 per cent and Nilepet 8 per cent.

“Due to the adverse security situation, OVL in coordination with the Indian Embassy in South Sudan has evacuated all its 11 personnel posted in South Sudan. Other partners of OVL in the assets have also evacuated most of its personnel from the country,” the statement said. The company said it was closely monitoring the security situation and was in constant interaction with its partners in the assets and the Indian Embassy at Juba. “Operations will be resumed once the situation is normalised,” it said.

Fighting in South Sudan, which broke out when rebel forces loyal to deposed South Sudanese vice-president Riek Machar attempted a coup, has already claimed many lives including that of Indian soldiers working as United Nations peacekeepers.

On its part, the U.S. has evacuated its 380 officials and private citizens to Nairobi and other locations along with about 300 others. South Sudan seceded from neighbouring Sudan in July 2011, and took three-quarters of the formerly united country's oil output. Landlocked South Sudan has sub-Saharan Africa's third-largest oil reserves after Nigeria and Angola. The oil produced in OVL's fields and other projects in the country are exported through pipelines across neighbouring Sudan.

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