March 21, 2013 / 2:12 PM / 7 years ago

South Sudan presses ahead with alternative pipelines study

ADDIS ABABA (Reuters) - South Sudan said on Thursday it is pressing ahead with studies into new oil pipelines to Kenya and Djibouti following a deal to restore exports through onetime civil war foe Sudan.

South Sudan's Information Minister Barnaba Marial Benjamin addresses a news conference in the Kenyan capital of Nairobi April 2, 2012. REUTERS/Thomas Mukoya

Information Minister Barnaba Marial Benjamin said South Sudan has hired Germany’s ILF Consulting Engineers to assess the feasibility of pipelines to Lamu in Kenya and through Ethiopia to Djibouti.

Benjamin said a pipeline to Djibouti would serve large potential oil reserves in eastern Jonglei state - a remote region struggling with an insurgency and violent tribal clashes.

“The amount of oil deposits and supply will increase and will need additional pipelines, and the one through Ethiopia to Djibouti is appropriate,” he said, speaking in the Ethiopian capital on the sidelines of an information technology gathering.

“It’s only the oilfields in Upper Nile and Unity states for now but we have the whole of Jonglei state … (where) there are huge oil deposits.”

Sudan and South Sudan earlier this month agreed to resolve bitter border and security disputes, a deal that would let Juba restart oil production and export through pipelines in Sudan.

Landlocked South Sudan shut down its 350,000 barrel-per-day crude output in January last year in a row with Sudan over pipelines fees as well as claims its northern neighbor confiscated millions of barrels of crude.

The closure devastated both economies which rely on foreign currency from oil to import food and fuel.

South Sudan signed deals with Ethiopia, Djibouti and Kenya last year on possible pipeline routes.

South Sudan said last year it would split up a massive oil block covering much of Jonglei state largely held by French major Total to speed up exploration in the area.

It wants to boost exploration because most old oilfields face declining reserves. In 2011, the International Monetary Fund said South Sudan’s production was likely to halve by 2020 without new discoveries or improved recovery.

Juba has also recently agreed to build roads through Ethiopia to Djibouti to transport crude in trucks.

Barnaba dismissed concerns the project was unfeasible due to high costs, as well as claims the moves were only meant to cut oil links with Khartoum.

“We are an independent state - every country has its own interest. They are doing their development, we are doing ours,” he said.

Editing by David Cowell

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