(Adds details from budget, background)
By Carl Odera
JUBA, July 2 South Sudan plans to borrow 3
billion South Sudanese pounds, about $1 billion at the official
rate, from oil companies during the coming financial year to
help cover repayments on domestic loans and previous oil
advances, the government said in a budget document.
South Sudan has turned to oil companies before to plug a gap
caused by a drop in oil output, the main source of cash for a
nation mired in conflict since mid-December. Fighting between
rebels and the government has damaged some fields.
The budget anticpates revenues of 11.553 billion pounds for
the 2014/2015 fiscal year, which is starting in July. About
three-quarters of that is due to come from oil earnings,
according to the text of the finance minister's speech dated
A lawmaker told Reuters it was presented to parliament on
From those revenues, the government said, 3.711 billion
pounds would be paid to cover domestic loans and oil advances.
"In order to offset the negative impact these repayments
will have on our budget financing next financial year, we intend
to borrow a further 3 billion pounds from the oil companies,"
Finance Minister Aggrey Tisa Sabuni said in the speech.
He said this borrowing was "in effect rolling our obligation
over until such a time as our budget is on a more sustainable
The amount is equivalent to about $1 billion at the official
rate of 2.9623 South Sudanese pounds to the dollar. Most
businesses have to operate at an unofficial rate of a little
more than 4 pounds to the greenback.
The minister did not name the oil companies which would be
approached. The main investors in South Sudan include China
National Petroleum Corp (CNPC), India's ONGC Videsh
and Malaysia's Petronas.
The budget document detailed previous borrowing from
companies, saying that as of June 25 it still owed CNPC $256
million and trading firm Trafigura $78 million.
The document said projected revenue was based on oil
output's rising to 260,000 barrels per day by the end of the
year from 180,000 bpd at the start of the year, an apparent
reference to the fiscal year although it did not specify.
An oil ministry official last month put production in late
June at about 160,000 bpd.
($1=2.9623 South Sudanese pounds at the official rate)
(Reporting by Carl Odera; Writing by Edmund Blair and Drazen
Jorgic; Editing by Robin Pomeroy)