SUDAN: Sudan's acting Oil Minister says exports of South Sudan's oil have been halted until a deal on transit fees is reached

Record ID: 344096

  • Title: SUDAN: Sudan's acting Oil Minister says exports of South Sudan's oil have been halted until a deal on transit fees is reached
  • Date: 29th November 2011
  • Summary: HEGLIG OIL FIELD, SOUTH SUDAN (FILE-2010) (REUTERS) PETROLEUM RESERVOIRS OIL PIPELINES ENGINEERS IN FRONT OF ONE OF THE OIL BASINS PIPELINES OIL TANKERS NEAR A PIPELINE.
  • Embargoed: 14th December 2011 12:00
  • Keywords:
  • Location: Sudan, Sudan
  • Country: Sudan
  • Topics: International Relations,Politics,Energy
  • Reuters ID: LVACS4SSSYRBONX68B9NY5BJUZAP
  • Story Text: Sudan said it has halted landlocked South Sudan's oil exports until the two agree on a transit fee, stepping up a row between the former civil war foes over how to untangle their once-integrated oil industries.
    South Sudan seceded on July 9, taking about three-quarters of the formerly united country's roughly 500,000 barrels per day (bpd) of oil production - the lifeblood of both economies.
    The new nation still relies on a pipeline running north through Sudan to a Red Sea port to export crude, but the two sides have not agreed how much South Sudan should pay to send its oil through Sudan.
    Officials decided to stop the government of South Sudan's oil exports - roughly 200,000 bpd - on November 17, Ali Ahmed Osman, Sudan's acting oil minister, told reporters, adding the pipeline was still running and international firms would not be affected.
    "We took a decision to stop any oil belonging to the government of South Sudan to cross Sudan for exportation unless the legal procedures on the export issue are accomplished," Osman said on Monday (November 28).
    South Sudan has been selling about 200,000 bpd of oil since it declared independence, according to figures provided by the country's petroleum ministry.
    Elizabeth James Bol, South Sudan's deputy oil minister, sharply criticised Sudan's move, calling it a "sign of irresponsible and abusive anger which does not show any sense of leadership."
    Sudan had been allowing South Sudan to continue exporting crude without a final agreement, on the expectation that the fees would be paid after a deal.
    Osman said South Sudan already owed Sudan some 727 million US dollars in arrears for the period between July 9 and the end of October.
    "If they come for negotiations and agreement for utilizing the oil facilities which belong to us, we are ready for negotiations. But as of this moment we will not allow for any oil to cross except through a signed agreement between us and the government of South Sudan," he said.
    Sudan previously blocked a shipment of South Sudan's oil in August, and said it was asking for a transit fee of 32 US dollars per barrel. South Sudan rejects the figure as too high.
    Before South Sudan seceded, the two governments split revenues from southern oil roughly in half.
    Violence along the vaguely-defined border has already stoked tensions, with both accusing the other of backing rebel groups on either side of the border.
    Sudan's move to block South Sudan's exports was likely to further complicate sensitive talks over a raft of unresolved issues such as debt and pensions being discussed in the Ethiopian capital Addis Ababa.
    South Sudan has repeatedly threatened to build an alternative pipeline to export its crude, but analysts say this has little prospect of becoming viable soon because it requires fresh oil finds and an end to unrest in oil-producing areas.
    South Sudan split off into the world's newest country after voting overwhelmingly for independence in a January referendum promised in a 2005 peace deal that ended decades of civil war with the north.
    Oil was one of the factors behind the conflict, which killed an estimated two million people.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register