An oil well in a field in Ruweng State, South Sudan (Reuters)

South Sudan's Minister of Finance, Awu Daniel Chuang, said that the country's revenues from crude oil sales had diminished due to the ongoing war in its northern neighbor, Sudan, which led to the disruption of a pipeline linking to the port of Port Sudan there, which contributed to the delay in disbursing the salaries of government employees in South Sudan.

South Sudan was pumping about 150,000 barrels per day of crude oil for export through Sudan, and paying it transit fees according to a formula that was agreed upon when South Sudan seceded in 2011, taking with it most of the oil production that the unified Sudan had.

Three Sudanese officials told Reuters earlier this week that the main pipeline from South Sudan has been experiencing work interruptions since last month, due to problems related to the war between the Sudanese army and the Rapid Support Forces.

Chuang added in a press conference yesterday, Thursday, that government employees have not received their salaries for 6 months, for reasons including a decline in oil revenues. He added, "The situation has worsened because of what is happening in Sudan... and South Sudan depends on oil for more than 90% to finance its government expenses."

Representative Peter Magaya Ngbanagano, who is responsible for a parliamentary subcommittee on oil affairs, stated in a letter to President Salva Kiir last Tuesday that the stoppage, if it continues, could lead to losses of no less than $100 million per month.

South Sudan, which descended into civil war from 2013 to 2018, is struggling to restore production to pre-war levels of between 350,000 and 400,000 barrels per day.

South Sudan depends on exporting its oil abroad via a pipeline that passes through Sudan to Port Sudan (Al Jazeera)

Case of force majeure

The Sudanese Minister of Energy, Mohieldin Naeem, announced in a letter dated the 16th of this month a state of force majeure, due to a “major rupture” in the pipeline that transports crude oil from South Sudan to the city of Port Sudan on the Red Sea for export.

The letter said that the rupture occurred in February in the “military operations area” in Sudan, where the conflict has been raging since April last year.

It is noteworthy that about 9 million of South Sudan's 12.4 million people are in need of humanitarian aid, according to United Nations figures.

The United Nations accuses the ruling elite in South Sudan of massive plunder of the treasury and public resources, as the country ranks 177 out of 180 countries on the corruption index of Transparency International.

Commenting on the cessation of South Sudan’s oil exports, Buboya James Edmond, executive director of the Juba-based Institute for Social Policy and Research, said that oil sales finance 95% of government operations, adding that even when the oil was flowing, the government was not able to pay the salaries of civil servants. For several months.

He warned, "If the oil does not flow, there will be a collapse of the government, which may force citizens to go out to protest, and the army will likely join the crisis."

For his part, Akol Madok, head of the Economics Department at the University of Juba, said that the situation is “not good” for the average southern citizen.

He warned that the situation will worsen in the next two or three months, because the central bank “may lack foreign reserves and will not be able to supply hard currency to the market.”

Andrew Smith, senior Africa analyst at risk intelligence firm Verisk Maplecroft, said the hit to government finances caused by the damaged pipeline meant it was "highly likely" elections scheduled for next December would be postponed.

Source: Agencies