(COLOMBO) – Sri Lanka’s intention to explore crude oil imports from South Sudan as part of its energy diversification strategy has drawn concern from a former ambassador to Juba, who warned of significant political, technical and economic risks tied to such a move.
Kana Kananathan, Sri Lanka’s former Ambassador to South Sudan, has urged the country’s energy authorities to reconsider importing crude from the East African nation. Speaking to local media, he pointed to the active United States sanctions, unpredictable supply routes and refinery limitations as key obstacles.
“While diversification is necessary for energy security, importing South Sudanese crude at this stage is neither practical nor economically viable,” Ambassador Kananathan stated.
The United States imposed sanctions in 2018 on at least 15 South Sudanese oil-related entities, including the national oil firm Nilepet. These measures aim to prevent oil revenues from fuelling internal conflict. As a result, any company or country purchasing South Sudanese oil must obtain a US export licence, complicating trade, especially for transactions in US dollars.
Due to these restrictions, most major oil traders have avoided dealing with South Sudan unless steep discounts are offered to offset the legal and commercial risks.
South Sudan, a landlocked country, relies on a single pipeline through neighbouring Sudan to Port Sudan on the Red Sea for all crude oil exports. However, frequent disruptions due to political instability, armed conflict and Red Sea insecurity, particularly linked to Houthi rebel activity, have undermined confidence in this route.
In recent months, several force majeure declarations have been issued by operators due to pipeline closures, violence or logistical failures, raising concerns about the reliability of delivery. Kananathan noted this is especially concerning for a country like Sri Lanka, which has limited fuel reserves and a refinery infrastructure that demands consistency in crude supply.
Even if crude could be reliably delivered, the shipping route via Port Sudan requires navigating militarised zones and underdeveloped infrastructure, resulting in high insurance and transportation costs, and potential delivery delays.
South Sudan exports two types of crude: Nile Blend (semi-sweet) and Dar Blend (heavy, acidic). Dar Blend, in particular, is problematic. It has a high Total Acid Number (TAN of 2.1 to 2.4), which makes it corrosive to refineries not equipped to process heavy and acidic oils.
Sri Lanka’s only operating refinery at Sapugaskanda processes up to 50,000 barrels per day and is optimised for light to medium sweet crude grades. Processing heavier South Sudanese blends would require major investment in corrosion-resistant materials, desulfurisation systems, and specialised equipment for heating and processing.
| Crude Oil Type | Properties | Compatible with Sapugaskanda? |
|---|---|---|
| Nile Blend | Semi-sweet, medium weight | Limited compatibility |
| Dar Blend | Heavy, acidic (TAN 2.1–2.4) | Not compatible |
“These upgrades would eliminate any cost advantage from discounted crude,” the ambassador said. With Sri Lanka’s foreign reserves already under pressure and oil prices fluctuating globally, taking on such high-risk crude could bring more economic harm than benefit.
Kananathan advised that Sri Lanka should instead prioritise reliable and technically compatible suppliers such as Nigeria’s Bonny Light or Arab Light crude, which are already proven to work with the country’s existing refinery systems and come without the risk of US sanctions.
“South Sudan’s crude is not suitable for Sri Lanka for several clear reasons,” he emphasised. “The sanctions make legal transactions difficult. The supply route is unreliable. The crude itself requires refinery upgrades we cannot afford.”
The former ambassador also recommended that Sri Lanka concentrate on long term solutions such as modernising domestic refining capacity, citing the proposed Hambantota refinery project as a better alternative to importing risky crude.
“Our energy future must be built on security, not uncertainty,” Kananathan concluded, calling for strategic planning in line with both technical feasibility and political safety.
South Sudan, which relies heavily on oil for revenue, continues to face challenges in reaching stable export partnerships due to its internal crisis and dependence on vulnerable infrastructure. Other hand, energy markets like Sri Lanka must weigh the geopolitical and technical implications carefully before seeking partnerships in fragile regions.
