Ethiopia has resorted to start shipping cheaper oil from South Sudan to substitute the expensive one from the Middle East.
According to Ethiopia’s State Minister Koang Tutlam, the substitution of the product will save the country around 20 percent of the $3.4 billion (Ksh 340 billion) it spends on importing four million tonnes of the product.
“We import almost all of our oil and other refined products from the Middle East, but owing to the proximity of about 200km between the oilfields of Pagak and Adar and the Ethiopian border, we stand to save so much,” said Tutlam when he attended a two-day South Sudan Oil and Gas Conference in Juba.
The conference was organised by South Sudan’s Petroleum Ministry in partnership with African Oil and Power, an organisation that brings together ministers and senior government officials and top executives of private sector companies spanning the energy value chain.
Delegates came from Ethiopia, Egypt, Somalia, Norway, the US, South Africa and Kenya. The conference is meant to explore ways of utilising oil resources to achieve economic stability
Mr Tutlam said his country exports hydroelectric power to South Sudan and will soon export about 400MW to Kenya.
He noted that if the revitalised peace process that is anchored on championing stability and economic recovery comes to fruition, Ethiopia will become a big market for South Sudan’s oil.
“I think all will be well after two to three years after which the two countries can put up infrastructure that will benefit both nations,” he said.
South Sudan has the third-largest oil reserves in sub-Saharan Africa estimated at 3.5 billion barrels, most of it unexplored.