UPDATE 1-South Sudan to resume pumping crude oil on Jan 8, minister says

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JUBA, Jan 7 (Reuters) – South Sudan aims to resume oil production at its Blocks 3 and 7 on January 8 with initial output of 90,000 barrels per day, Petroleum Minister Puot Kang Chol said on Tuesday.

South Sudan’s economy has been under pressure in recent years amid communal violence while vital crude oil export revenue has been hurt by export disruptions due to war in Sudan.

Over the weekend, Sudan lifted a nearly year-long force majeure on the transport of crude oil from its neighbour South Sudan to a port on the Red Sea after security conditions improved.

The government has reached an agreement with Petronas until it finds a new partner to replace the Malaysian producer, Chol said.

In August Petronas announced it would exit South Sudan after running operations in the country for around three decades.

Petronas said at the time its unit had initiated proceedings against South Sudan on accusations of blocking a $1.25 billion sale of its local assets and of taking over the business.

Prior to the war in Sudan, South Sudan had been pumping about 150,000 barrels per day of crude through Sudan for export, under a formula established when South Sudan gained independence from Khartoum in 2011. (Reporting by Denis Elamu, writing by George Obulutsa; editing by Elisha Bala-Gbogbo and Jason Neely)

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