Sudanese Oil Signals a Farewell Journey
Sudan Events – Agencies
A series of consecutive blows have struck Sudan’s oil sector in recent weeks, the latest occurring just two days ago. After decades of growth and production—during which Sudan joined the list of oil-producing nations in the late 1990s—the industry now finds itself facing unprecedented decline.
Sudan’s oil reserves are estimated at around six billion barrels, of which only 20% has been extracted due to financial and administrative challenges. The country had long relied on oil revenues as a key source of foreign currency, especially those generated from facilities used to transport and export South Sudan’s crude through Sudanese territory in exchange for sovereign service fees.
However, recent developments—including the Rapid Support Forces’ (RSF) seizure of the Heglig oilfield in West Kordofan, which hosts the main pumping station for South Sudan’s oil, and China’s notification of its intent to terminate its contract for Block 6 in the Balila area—have collectively pushed Sudan out of the ranks of oil-producing nations.
Contract Termination
On December 7, China National Petroleum Corporation (CNPC), through its subsidiary PetroEnergy, informed Sudan’s Ministry of Energy and Mining that it urgently needed to hold a meeting in Juba in December 2025 to discuss the early termination of its oil operations in Sudan.
The company justified its decision by citing the continuous deterioration of security around the field, repeated acts of sabotage and theft, and the collapse of supply chains due to the conflict, which rendered essential spare parts and equipment unavailable.
CNPC revealed that it had made significant efforts to resume production after the attack on Balila Airport in October 2023, including establishing a new security mechanism, securing alternative supply routes, and redeploying employees to the eastern field. Yet these efforts failed, and production in Block 6 could not resume amid ongoing armed conflict.
The company stated that with expenses but no revenue, the situation had become financially unsustainable and incompatible with CNPC’s overseas investment policies. It expressed hope that the meeting with Sudanese officials would take place no later than December 31, 2025. The company regretted that early termination of the Production Sharing Agreement (PSA) had become unavoidable under force majeure conditions.
Staff Withdrawal and Production Halt
Just two days after CNPC’s letter, Sudanese public opinion was shaken by news of the RSF’s takeover of the Heglig oilfield—the country’s largest producing field.
An employee at Heglig, who requested anonymity, told Al-Muhaqiq that production at the field had completely stopped. He said companies working there had withdrawn their staff to South Sudan two days before the anticipated attack. He explained that shutting down Heglig effectively halts oil production across all Sudanese states, removing the country entirely from the list of oil-producing nations.
Heglig, located in West Kordofan on the border with South Sudan, contains the pipelines and pumping station used to export South Sudan’s crude through Port Bashayer in eastern Sudan.
Mounting Debts
Commenting on the Chinese company’s decision, former Sudanese Minister of Petroleum, Engineer Ishaq Bashir Jamaa, noted that CNPC—the Chinese state-owned investor in Block 6—had proposed terminating the contract before. In 2019, China raised the issue due to Sudan’s accumulating debts.
Jamaa told Al-Muhaqiq that China had submitted letters on the matter during the government of Dr. Mohamed Tahir Ela in March 2019, but the decision was postponed at the time on the grounds that the new government needed more time to examine the proposal.
New Understandings
Jamaa added that another possibility is the existence of U.S.–Chinese understandings regarding China’s investments in Sudan’s oil sector, particularly since the original discoveries were made by the American company Chevron before China took over extraction operations. He suggested that a settlement may have been reached outside Sudan’s involvement, noting that the proposed meeting would be held in Juba—a country aligned with the RSF and hosting RSF fighters among its ranks.
He further explained that after South Sudan’s secession, Sudan’s crude production dropped to around 120,000 barrels per day—enough to feed the Khartoum and El-Obeid refineries and maintain pipeline flow. The government used to purchase CNPC’s share of daily output but has been unable to settle its dues to this day.
Jamaa confirmed that companies had shown no willingness to fund operational costs, leading to a decline in production to just 30,000 barrels per day before the war, until production eventually ceased entirely due to repeated attacks during the past years of conflict.
An Early Exit
Oil journalist Abdelwahab Jumaa said CNPC had effectively begun its exit from Sudan in 2019 after withdrawing from its most important concessions in Blocks 1, 2, and 4, along with the departure of Indian and Malaysian partners after their concession contracts expired.
Jumaa told Al-Muhaqiq that Block 6 in Balila was the company’s only remaining concession, and that its expiration date was approaching. “The concession in Balila was expected to be renewed, but since most fields had already reverted to the Sudanese government, the company was left with only Block 6,” he said.
He downplayed the significance of CNPC’s remaining presence, noting that most of its investments had shifted to South Sudan following secession. He added that the company’s assets in Sudan had suffered major security disruptions during the war between the Sudanese army and the RSF, especially after the attack on Balila.
Jumaa said that the upcoming meeting is not solely about contract termination but also about reviewing the agreement, noting that the company maintains a share in the pipeline that transports South Sudan’s oil from Fula to Jebelain and on to Port Bashayer.
Source: Almohagig
