South Sudan’s loan requests to oil companies rebuffed

South Sudan’s government has been unsuccessfully seeking $200 million in loans from oil companies since June 2014, according to officials.

South Sudan’s government has been unsuccessfully seeking $200 million in loans from oil companies since June 2014, according to officials.

Officials in both the ministry of finance and the ministry of petroleum confirmed that South Sudan’s government has approached Chinese, Malaysian and Indian oil executives about the emergency loans.

The government was rebuffed because of concerns about difficulties the country has had paying back $1.6 billion in earlier loans. According to sources the government offered to use the country’s oil reserves to guarantee the loans, but petroleum officials expressed concern about the supply of crude that still remains.

The efforts began, sources said, under the former Finance Minister Aggrey Tisa Sabuni.

South Sudan’s petroleum sector has been hard hit by the current conflict. In December 2013, there were 613 oil wells in the country, according to ministry of petroleum statistics. By February 2014, the number of operational wells was around 470. Since then, about 150 wells operating in Unity state have been forced to close down because of fighting.

Platts Commodities Information Service reports that the country is now producing around 141,000 barrels per day, down from a high of 350,000 barrels per day in the period after independence.