The Al-Jaili refinery in Sudan has sustained extensive damage from conflict, leading to a shutdown and reliance on costly fuel imports. Regaining operational capacity will necessitate over $1.3 billion and significant time. The ongoing war has exacerbated the country’s economic crisis and challenges in oil export agreements with South Sudan.
The ongoing conflict in Sudan has severely affected its largest oil refinery, the Al-Jaili refinery, located approximately 70 kilometers north of Khartoum. Following the outbreak of fighting in April 2023, the paramilitary Rapid Support Forces (RSF) seized control of the facility, which led to a complete operational shutdown by July due to heavy artillery fire. Although the regular army regained control in January 2024, the refinery remains largely non-operational, suffering extensive damage.
Once a vital component of Sudan’s energy infrastructure, Al-Jaili had the capacity to process 100,000 barrels of crude oil per day, fulfilling almost half of the nation’s fuel requirements. Economist Khalid el-Tigani emphasized its importance, stating that the refinery provided 50 percent of petrol, 40 percent of diesel, and 50 percent of cooking gas for the country. With its closure, Sudan is heavily reliant on fuel imports obtained through private sector transactions, which have become financially burdensome amidst a falling Sudanese pound, now trading at around 2,400 to the dollar.
The armed conflict also led to a massive fire during the army’s attempt to recapture the refinery, exacerbated by allegations from both sides about the cause of the blaze. The RSF contended that the air force used barrel bombs while the army accused the RSF of setting the fire to impede national infrastructure. An estimated $1.3 billion will be required to restore the refinery, with some components needing to be manufactured abroad, thus prolonging the repair timeline to potentially over three years.
Historically, Sudan benefited from its domestic oil reserves discovered in the 1970s and 1980s, transforming its economy. However, following South Sudan’s secession in 2011, which took three-quarters of the oil output, the situation became precarious. Despite retained agreements for oil pipeline use, the current conflict threatens this arrangement, especially after a key pipeline was damaged last year, which halted exports until recently. The long-term implications of these compounded issues pose significant challenges to Sudan’s economic recovery and stability.
In conclusion, the Al-Jaili refinery’s operational status has been critically compromised due to ongoing conflict, resulting in considerable economic challenges for Sudan. The country’s reliance on fuel imports, coupled with a plummeting currency, complicates the situation further. Significant repair costs and logistical delays threaten the refinery’s recovery, while historical events underscore the complexities surrounding the region’s oil production and export capacities.
Original Source: www.youralaskalink.com
