Exploring the Feasibility of Introducing Refinery Project assignments in South Sudan

Question

Task: What are the economic, environmental, and socio-political implications of introducing Refinery Project assignments in South Sudan, and what challenges and opportunities does the nation face in this regard?

Answer

1. Introduction

1.1. Background of study

Since its independence in 2011, South Sudan has embarked on nation building in all aspects with the aim of establishing a stable and prosperous economy. The abundant oil reserves concentrated in the Melut and Muglad Basins offer a unique opportunity for economic growth and diversification, making the country a significant player in the global energy market. Historically, South Sudan relies heavily on the exportation of crude oil. However, this approach poses serious challenges such as susceptibility to price fluctuations which hinder the resilience and long-term sustainability of its energy sector. South Sudan’s economy is intricately connected to its oil sector, accounting for 33% of its gross domestic product (GDP), 90% of the government’s revenue, and 95% of its exports (Mordor Intelligence, 2023). Correspondingly, the country loses out on potential economic opportunities due to lack of value addition via oil refining. Consequently, Refinery Project assignments may potentially address these gaps, thus enabling the nation to process its own crude oil, resulting in Economic Diversification assignment and diminished dependence on the volatile global oil markets. Geopolitically, the nation has been plagued with historical conflicts and tensions which have influenced the stability of its oil industry. In terms of environmental considerations, the nation contains fragile ecosystems and rich biodiversity which present a unique challenge of balancing minimal environmental impact and environmental preservation vis-à-vis maximising the efficient use of natural resources and its resultant economic development.

 Figure 1. South Sudan oil and gas upstream market size.

Source: (Mordor Intelligence, 2023)

Figure 2. Monthly crude oil production in South Sudan for the last half of 2020, in million barrels

Source: Ministry of Finance, Government of South Sudan

Essentially, main aim of this study is to comprehensively explore the historical, geographical and economic context of South Sudan’s oil sector and assess the feasibility of oil Refinery Project assignments within the country. In order to achieve this aim, comprehensive review of existing literature on oil Refinery Project assignments, overview of the current South Sudanese oil sector and examination of the geopolitical dimensions and environmental considerations will be conducted. Findings from this study will provide valuable insights that may inform policy and economic decisions, foster sustainable economic development for South Sudan and offer foundation for further research into the evolving global energy dynamics.

1.2. Research questions

The research questions for this study include:

• What is the economic, environmental, technological and infrastructural feasibility of introducing Refinery Project assignments in South Sudan?

• Should the South Sudan government promote a greater reliance on refinery in order to reduce the greater Southern Sudanese fuel import?

• What is the overall impact of refinery on the development, economy, community and environment in South Sudan?

• What are the challenges facing the Refinery Project assignment in South Sudan?

1.3. Research objectives

The main aim for this research is to explore the feasibility of introducing Refinery Project assignments in South Sudan. The objectives of this study include:

• To identify the introduction and development process of Refinery Project assignment.

• To evaluate the contribution of the Refinery Project assignment on the sustainable development, Economic Diversification assignment, environmental impact and overall community impact on South Sudan.

• To identify potential challenges facing the development of the Refinery Project assignments in South Sudan

• To recommend innovative solutions to mitigate impact of Refinery Project assignment failures in South Sudan.

1.4. Significance and contribution

The significance of the exploration of the feasibility of the introduction of Refinery Project assignments in South Sudan include Economic Diversification assignment and resilience, sustainable development, environmental stewardship, enhance socio-political stability, impact on global energy market dynamics, infrastructural development and community impact and empowerment.

2. Literature review

2.1. Theoretical and conceptual review

Economically, the feasibility of introducing Refinery Project assignments to a country is usually a complex deliberation often linked with various economic development theories. Gelb (2018) argues that Economic Diversification assignment is vital for nations rich in resources so that they may not fall into the trap of dependence on a single commodity. He suggests the application of the structural transformation theory where such nations shift from primary sectors that are heavily dependent on the single rich resource into more advanced value addition industries. For South Sudan, this may involve the development of oil refineries within the country which add value to the crude oil currently produced domestically. World Bank (2022) suggest that such a shift may enhance the resilience of South Sudan’s economy and political stability. Additionally, the successful implementation of Refinery Project assignments requires certain technological and infrastructural requirements. Birgen, et al. (2020) highlight the importance of the dependence theory especially for developing economies such as South Sudan. The theory emphasises the importance of increased dependence on local internal actors throughout all the phases for acquisition and implementation of refining technologies domestically. However, Makol (2023) contends that South Sudan may not have the requisite domestic technological, infrastructural and human resources for Refinery Project assignments. Simons (2019) suggests that execution of the infrastructure-led theory may aid with such challenges where identification and implementation of the necessary domestic developments in energy, transportation and processing infrastructure may first be undertaken before setting up the refineries.

Lerner, et al. (2017) highlights that effective governance is vital for resource-rich countries, where accountable and transparent governance is vital for optimum benefit from the natural resource extraction. Correspondingly, it is vital to explore the existing socio-political dynamics of South Sudan and how they may impact the implementation of Refinery Project assignments. Tsogtochir and Park, (2021) postulate the resource curse theory that hypothesises that mismanagement of resource wealth leads to economic and political instability. Numerous reports have highlighted how incessant historical conflicts and challenges in governance in South Sudan have been negatively linked with its oil sector. Furthermore, Adieb (2022) suggests that robust governance systems in South Sudan may enable the country to navigate the intricacies of the oil sector. Currently, the global energy sector has witnessed a shift from conventional energy sources such as fossil fuels into alternative energy sources. Yat (2015) suggest that establishment of Refinery Project assignments for oil producing countries such as South Sudan, may enable them to reposition themselves strategically within the dynamic global sector.

Sovacool, et al. (2018) emphasises the need for sustainable and environmentally responsible practices during the extraction and processing of natural resources. He points out the Environmental Kuznet’s Curve (EKC) theory which suggests that an inverse U-shaped correlation between environmental degradation and economic development. Sovacool, et al. (2018) further offers propositions on how resource-rich countries such as South Sudan may balance economic growth with environmental preservation. On the other hand, Neagu and Teodoru (2018) emphasises the importance of utilising the Inclusive Development theory when implementing refineries in nations such as South Sudan. It states that development projects ought to benefit all segments of the society in which it is located. Consequently, the study will explore how the refineries may contribute to skill development, job creation, positive social impact and overall community empowerment in South Sudan.

2.2. Empirical review

Numerous empirical studies have explored the economic feasibility, socio-political dynamics, sustainable development, global energy market dynamics, technology transfer and infrastructure development and the social impact of refineries to resource-rich countries. Gelb, (2018) undertook a study on the Economic Diversification assignment for oil-dependent countries such as United Arab Emirates and Norway. He emphasises the immense value of value addition to raw materials via downstream activities. Lerner, et al. (2017) examines the adverse impact due to challenges facing governance in Sudan’s oil sector. Sovacool, et al. (2018) investigates the implications to the environment due to oil refining activities and its possible solutions with case studies in Singapore and Germany (World Bank, 2022). Islami, et al. (2022) and Saunders, et al. (2018) assess global energy trends including the recent shift to alternative energy sources, with case studies on how oil-producing countries such as Saudi Arabia have successfully integrated Refinery Project assignments within the evolving energy market. Birgen, et al. (2020) evaluates the trends in technology within the energy sector while reports from the European Commission (2020) provide case studies on various infrastructure development models for nations that have effectively integrated refining technologies such as China and South Korea. The International Labour Organisation (2021) undertook case studies into how extractive projects have social dimensions including job creation and community development while World Economic Forum (2018) demonstrate case studies on how inclusive growth ensures the benefits due to Refinery Project assignments are equitably distributed to all the various segments of society.

2.3. Research gap

Although existing literature adequately addresses the various aspects of Refinery Project assignments, there is an inherent gap in the specific context for South Sudan. Existing literature predominantly covers oil-producing nations in the Middle East with negligible attentions provided to emerging economies such as South Sudan. The unique economic, socio-political and environmental characteristics of South Sudan require dedicated research to understand the feasibility of introducing Refinery Project assignments in this nation.

3. Methodology

3.1. Research onion

This study will adopt a multi-layered approach in its design as stipulated by (Saunders, et al., 2018). The application of the research onion is detailed below:

• Research philosophy: The study takes a positivist stance while it seeks to understand the unique requirements for Refinery Project assignments in South Sudan.

• Research approach: Deductive research approach will be utilised for this study where it begins with the development of a theoretical framework based on existing literature and associated theories on Economic Diversification assignment, environmental impact, governance, technology transfer and social impact.

• Research design: Mixed methods research design that includes quantitative and qualitative research methods will be employed.

• Time horizon: The research will be comprised as a cross-sectional study, examining the feasibility of introducing Refinery Project assignments in South Sudan at a specific point in time. Additionally, longitudinal components that evaluate the changes over time within the nation’s economic and socio-political context may also be incorporated.

• Data collection methods and instruments: Quantitative and qualitative data collection methods will be employed for this study, including:

1. case studies of successfully implemented Refinery Project assignments,

2. surveys and questionnaires to collect quantitative data on economic feasibility, community perceptions and environmental concerns,

3. stakeholder interviews to understand socio-political dynamics, governance challenges and potential social impacts

4. Environmental Impact Assessment to assess the potential ecological consequences and possible mitigation measures

5. Technological and infrastructure analysis to examine potential technological and infrastructure requirements for South Sudan

• Data analysis: Quantitative data will be processed via SPSS software while qualitative data will be analysed thematically utilising coding techniques.

• Sampling technique and size: Purposive sampling methods will be utilised for stakeholder interviews to ensure equitable representation of the relevant government officials, environmentalists, industry experts and local communities. Random sampling may be used for the questionnaires, employing a sample size of 200 in order to capture diverse perspectives within the population.

• Ethical considerations: Relevant approvals will be obtained from the relevant boards, while obtaining participant consent, maintain their confidentiality and respecting cultural sensitivities will be maintained during the research (Creswell & Creswell, 2017).

4. Conclusions and limitations

Probable limitations to the study include data availability, access to certain stakeholders, navigating the dynamic political and economic nature of South Sudan.

5. Gantt chart

Figure 3. Gantt chart

Source: Author

References

Adiebo, K., 2022. Resource, economic and financial management in South Sudan: Taking stock of chapter IV of the R-ARCSS. African conflict and peacebuilding review, 11(3), pp. 39-63.

Birgen, Y., KIrui, E. & Kaire, J., 2020. Dependence theory. European Journal of economic and financial research , 3(2), pp. 78-152.

Creswell, J. & Creswell, D., 2017. Research design: Qualitative, quantitative and mixed methods approaches. 3 ed. London: Sage Publications.

Gelb, A., 2018. Economic Diversification assignment in resource rich countries. 2 ed. London: MacMillan Publishers.

Islami, F., Prasetyanto, P. & Kurniasari, F., 2022. The effect of population, GDP, non-renewable energy consumption and renewable energy consumption on carbon dioxide emissions in G-20 member countries. International journal of energy economics and policy, 33(6), pp. 15-25.

Lerner, A., Koshurina, V. & Wheeler, A., 2017. Mitigating risks of resource extraction for industrial actors and northern indigenous peoples. Arctic Review on Law and Politics, 15(5), pp. 59-80.

Makol, J., 2023. The geopolitics of energy resources in south sudan: Examining the geopolitical implications of oil, gas, and renewable energy, including the impact of resource dependence, energy security and energy access competition. Journal of humanities and social science, 28(8), pp. 01-04.

Mordor Intelligence, 2023. South Sudan oil and gas upstream market size & share analysis- Growth trends and Forecasts (2023-2028), Hderabad, Telangana: Mordeor Intelligence.

Neagu, O. & Teodoru, M., 2018. The economic competitiveness and inclusive development nexus: Empirical evidence from 101 economics. Studia Univeritatis 'Vasile Goldis' Arad -Economics Series, 28(3), pp. 1-19.

Saunders, M., Lewis, P. & Thornhill, A., 2018. Research methods for business students. 2 ed. Washington D.C: Pearson.

Simons, P., 2019. IEA perspectives on the global energy landscape. APPEA Journal, 10(2), pp. 15-55.

Sovacool, B., Axsen, J. & Sorrell, S., 2018. Promoting novelty, rigor and style in energy social science: Towards codes of practice for appropriate methods and research design. Energy research & social science, 5(1), pp. 15-32.

Tsogtochir, B. & Park, S., 2021. Natural resource curse exists in Mongolia? Focusing on budget transparency in local governments. Journal of Asia Pacific Economy, 28(1), pp. 650-663.

World Bank, 2022. With peace and accountability, oil and agriculture can support early recovery in South Sudan, Addis Ababa: IBRD.IDA.

Yat, T. D., 2015. An analysis of the influence of strategic resource utilisation on economic development: A case of public sector in South Sudan, Juba: Silwe Press.