June 26, 2019 / 3:34 PM / a month ago

South Sudan investigates its crude oil pre-sales regime

CAPE TOWN, June 26 (Reuters) - South Sudanese President Salva Kiir Mayardit has launched an investigation into crude oil pre-sale contracts from the country as it ratchets up production, a letter seen by Reuters on Wednesday showed.

The world’s youngest country, which split from Sudan in 2011, has one of the largest reserves of crude in sub-Saharan Africa. It plans to ramp up output to more than 350,000 barrels of crude per day by the middle of 2020, up from just over 140,000 barrels per day (bpd) currently.

In the letter signed on June 21, President Mayardit set out the terms of reference for the investigation committee to be chaired by Minister of Cabinet Affairs, Martin Elia.

Besides probing the "pre-sale process, off-take, sale, payments and taxes", the committee must coordinate with the auditor general to reconcile payments and liabilities against the government. It is expected to report back to Mayardit within 14 working days from June 21.

The committee must also "engage the ministries of Finance and Planning, Petroleum and the Bank of South Sudan to verify the data on presale of crude", said the letter.

There was no immediate response from government officials to a Reuters request for more detail.

South Sudan’s oil industry is dominated by Asian firms including China National Petroleum Corporation (CNPC), Malaysia’s Petronas and India’s Oil and Natural Gas Corporation (ONGC Videsh). (Reporting by Wendell Roelf and Denis Elamu in Juba; editing by Emelia Sithole-Matarise)

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