AOP talks to Makear Michael Dot, CEO of Nile Petroleum Services, about South Sudan’s efforts to integrate with the East African region, and what the country has to offer its neighbors.
Nile Petroleum Service Co. (NPSC) is a South Sudanese oil and gas services company based in Juba and established in 2011. Primarily focused on engineering, construction, maintenance, troubleshooting, testing and commissioning and tanks de-sanding, NPSC is a leader in South Sudan’s petroleum industry private sector, and also supplies oilfield equipment.
What are the updates for Nile Petroleum Services in 2017?
Right now, we are still operating and we have an expansion plan but it is not yet in place because of the impacts of the oil price slump. With the oil price starting to recover, things are moving, but there is not a specific expansion plan that we can name.
We do aim to expand regionally in the East African region. For example, in a couple of days there is an oil and gas summit in Uganda, and we are looking forward to attending that summit to see the updates from the development of oil and gas production in Uganda. As soon as they state in Uganda, we will start looking forward to operating in Uganda, and also in Tanzania.
What does South Sudan have to offer the East African region, especially as it pertains to the oil and gas sector?
South Sudan is very important to the region, especially in oil and gas. We cannot deny that South Sudan is the only country in the region that has been producing oil and gas for more than a decade, so there is experience on the ground in South Sudan that should be exported to the region. It is crucial to the East African countries that are now growing in the oil and gas sector to benefit from our experience on the ground and the knowledge that we have here, in terms of operating, the impact on the environment, best practices, etc.
What obstacles do you see to regional integration?
The challenges we can face are of course infrastructure. South Sudan has an underdeveloped infrastructure that is really very crucial for businesses to be in place, such as a reliable Internet system, power and roads. Security is also very important. The infrastructure within South Sudan and the regional connections will need to be improved to facilitate business, because businesses cannot operate sustainably without power, without Internet, without a strong road network, etc.
How have you seen the security situation in South Sudan evolving in 2017? How does the security impact local business?
Security has been a factor, but we are still operating in spite of that. There is a threat, but there is also an opportunity right now. At this moment, we have a footprint on the ground and are able to operate. Since January up to the present, there has been improvement to the security. There are not any tangible conflicts right now, and things are moving quite normally.
Security is still a factor, but for us there is not any tangible obstacle or constraint other than the road blockage and the lack of access to the fields. Because we cannot move by road or by river barge, it makes operating more expensive as goods must be moved via air transport. But we can still cope, and things are moving.
What advice do you have for investors interested in coming to South Sudan?
I would tell them is that if they are serious about making business in South Sudan, that there is very good potential because our market is not saturated. On the other hand, I would recommend for them to collect data regarding security directly from those companies who are operating on the ground. The local companies can give them the most accurate information for them to build their position.
There is a very strong push from the government right now to increase production, and there are opportunities. We are still making money right now, and we have fields that are not operating that will need to become operational soon. For example, the Minister of Petroleum announced at Africa Oil & Power in Cape Town that the target by the end of this year is to increase production to 300,000 barrels of oil per day from the current production levels of 120,000 barrels per day. For us to achieve this goal, we need new technology, new investment and new players to come in and join to boost production.
The most important issue for investors is regarding local content. For all investors, the easiest way to get access to the market is to team up with the local companies already on the ground.