The Royal Dutch Shell is planning to construct an oil pipeline line all the way from South Sudan to Ethiopia. Reliable sources told The Reporter that a business delegation from Shell visited South Sudan in November. The delegation that met senior South Sudan government officials expressed Shell’s interest in acquiring an oil exploration area in south Sudan and construct an oil pipeline that can haul crude oil from South Sudan oilfields to Ethiopia’s Gambella region.

After declaring independence in July 2011, South Sudan broke away with 75 percent of Sudan’s oil reserve. Oil started being produced in Sudan in the 1990s and has become the mainstay of the economies of the north and south. Most, but not all, of the oilfields are in South Sudan, but the export pipelines, Red Sea export terminal, and refineries, are in the north. Agreement to share control over oil resources and revenues was a central part of the 2005 Comprehensive Peace Agreement, but up to the eve of South Sudan’s secession, north and south had not resolved how to divide the industry or its revenues.

Referendums are indeed costly. Sudan has lost its oil reserves while its neighbour, Ethiopia, had lost its two ports and refinery in Eritrea. Landlocked Ethiopia has been importing refined petroleum products since 1998. Currently, the Ethiopian Petroleum Enterprise is undertaking a feasibility study on building a new refinery near the Ethio-Djibouti border.

Sources said Shell’s plan is to acquire an oilfield in South Sudan and build an oil pipeline stretching from South Sudan to Ethiopia, adding that Chinese firms could be involved in the project. If South Sudan accepts the proposal, the executives of Shell will present the idea to the Ethiopian government. “The Ethiopian government may consider building a refinery in the Gambella Regional State,” a senior government official told The Reporter.

David Kong, deputy head of mission at teh embassy of South Sudan in Addis Ababa, said he was not aware of Shell’s proposal.

By KALEYESUS BEKELE
EthiopianReporter