South Sudan is halfway the two-week process of shutting down its entire oil production, estimated at 350,000 barrels per day. The exercise was a drastic measure in a row with neighbour Sudan, but might leave thousands without jobs.

The Petrodar Operating Company (PDOC) base camp is a huge compound with air-conditioned offices, a mess hall and a guest house in the north of the dry and flat state of Upper Nile, South Sudan. Hundreds, maybe thousands of people are working here, both oil workers from all over the world as well as South Sudanese support staff.

But soon, this bustling place will be quiet. South Sudan is shutting down its entire oil industry because of a row with (North) Sudan over transit fees. South Sudan is landlocked and is therefore dependent on arch rival Sudan for transporting crude oil via pipelines to the coast. Sudan wants a transit fee of 36 dollar per barrel, but South Sudan refuses to pay.

South Sudan’s oil minister Stephen Dhieu Dau personally oversaw the shut-down on Friday, together with a high-level delegation of ministers and members of parliament. Speed was the key word. “You are not shutting down fast enough!” an official yelled at oil workers at the Moleeta oil field.

No more oil theft
If the shut-down continues, it will take away opportunities from Sudan to steal oil from the South. Southern officials have accused Sudan of stealing oil worth 815 million dollar. But it may also ruin South Sudan as a country, since 98 percent of its budget is funded by oil revenues.

A young employee of Petrodar wonders what his future will look like. “I have been working here for six years. If the oil production stops I will lose my job,” he says. “Everybody here makes his living out of the oil. I don’t know how to feed my wife and twins if the work stops.”

Alternative pipeline
South Sudan announced it will construct its own pipeline to the Indian Ocean. It has already signed a deal with Kenya, since it would run over Kenyan territory to the port town of Lamu. But details on who will build this multi-billion dollar pipeline and how fast have remained sketchy. Analysts wonder if it is worth the investment, since South Sudan might run out of oil within two decades.

With its own pipeline, South Sudan would have more control over its oil production and would be able to put an end to the dispute with its northern neighbour. “We always thought we produced 230,000 barrels per day at this well, but today I learned it is actually 270,000,” oil minister Dhieu Dau said on Friday.

As the shut down continued, President Salva Kiir of South Sudan met Sudanese president Omer al-Bashir on Friday in a bid to resolve the oil crisis. “If we are told to start producing again, we can get back to production within three days,” Hago Bakheed Mahmoud of the PDOC oil company said.