Accession to OPEC possible for south Sudan

If south Sudan emerged as Africa's newest country after the secession vote today, it could allow for Sudanese oil to be counted in OPEC reserves.

If south Sudan emerges as Africa's newest country after the secession vote beginning today, it could allow for Sudanese oil to be counted in OPEC reserves.

The energy minister of south Sudan, where about 80 per cent of Sudan's oil resources are located, said a possible future independent government in Juba would consider membership in OPEC "in the near future".

"If there are benefits to being members of OPEC, we'd love to be part of that," Garang Diing Akuong said. "It depends on the criteria of being a member, if we can meet the requirements."

The people of south Sudan are due to vote today on whether to split from the north after a half century of civil war. The week-long referendum is expected to result, eventually, in a new state.

Khartoum had been invited to join OPEC in 2006 during the organisation's push to expand its African membership.

Now, south Sudan's uncertainty about future oil production levels and the government's debt burden are hurdles to its own ambitions to join OPEC, a move that would lend prestige to the fledgling nation.

South Sudan's production level of 450,000 barrels per day (bpd) would put it just below the output of OPEC's smallest producer, Ecuador. Output from existing fields is projected to dwindle to 150,000 bpd in six years unless there is substantial new investment, said Egbert Wesselink, who advises the energy ministry in Juba through the European Coalition on Oil in Sudan. One of Sudan's most promising exploration blocks lies in the north.

Mr Akuong says south Sudan can double current production levels by attracting foreign capital and expertise and by exploring for new fields.

But even if production were to reach 1 million bpd within three years, as the energy minister hopes, south Sudan would need to export much of that to sustain an impoverished country with little infrastructure and an 85 per cent illiteracy rate. Angola, which joined OPEC in 2007, has had to ask the group of oil producers for quota exemptions as it builds its economy.

"Once you join OPEC, you are considered a rich nation and this may put some burden on Sudan," Omer Mohamed Kheir, the secretary general of Khartoum's energy ministry told Dow Jones Newswire in 2007.

A new south Sudanese state,if voters opt for secession, would also need to be able to pay for OPEC membership. That would depend on how much of Sudan's US$36 billion (Dh132.22bn) debt the new nation retained once Khartoum and Juba concluded negotiations due to resume after the vote.