IMF: Sudan oil output seen near 120000 bpd in 2012

Sudan's oil output, most of which disappeared with the independence of South Sudan, will likely not exceed 120,000 barrels per day this year, the International Monetary Fund said on Tuesday. The South's separation in July last year left Sudan without three-quarters of its crude production, half of its fiscal revenues and about 75 percent of its international payments capacity, the IMF said, calling for a refocusing on the non-resource sector. "Owing to waning mature fields... and other technical production problems, 2012 production is expected to sharply decline by 60 percent to 117,000 to 120,000 barrels per day (bpd)," the IMF said in a report after routine consultations earlier this year with Sudanese leaders, including the oil minister. At the beginning of 2012 officials in Khartoum were targeting 180,000 bpd by year-end. "Enhanced recovery in existing fields and further exploration will likely help production to increase again starting in 2013, with a peak expected in 2020 at near 240,000 bpd," the IMF said. Oil now accounts for three to five percent of Sudan's gross domestic product, down from around 15 percent, while providing a much-reduced 20-25 percent of revenue, the IMF said in its staff report completed in early September, just before Sudan and South Sudan signed key oil deals. Those pacts included a financial package worth about $3 billion that South Sudan offered Khartoum as compensation for the oilfields it lost at separation. They also agreed on fees for exporting the South's oil through northern pipelines for export. South Sudan halted oil production in January after accusing Khartoum of theft in a long-running fee dispute. Last month the Juba government ordered firms to start pumping again. "The economic situation is expected to continue to be difficult during the next 18 months," the IMF said, adding that a reform package adopted by Khartoum in June is an important step to restoring economic stability and reducing dependence on oil. Among its measures to address the crisis, the government raised taxes, devalued the currency, began phasing out fuel subsidies, and raised social spending. Inflation has soared to above 40 percent this year and the Sudanese pound has plunged in value on the black market while the government tries to boost exports of gold and other non-petroleum products. The South separated following a referendum under a 2005 peace deal that ended 23 years of civil war.