South Sudan threatens to shut oil pipeline
August 14 2011 at 04:09pm
REUTERS: A man waves South Sudan’s national flag as he attends the Independence Day celebrations in the capital Juba, July 9, 2011.South Sudan accused Khartoum of trying to charge too much for use of the northern pipeline and said it might shut it down, signalling a further rise in tension as both sides argue over dividing oil revenues.
The South took 75 percent of the country’s oil production of 500,000 barrels of oil when it became independent on July 9 as part of a 2005 peace deal that ended decades of civil war with the north.
But it depends on the North to use its refineries and the only cross-border pipeline to the Red Sea outlet of Port Sudan to sell the oil, the lifeline of both economies.
“The amount of money Khartoum wants us to pay is unreasonable,” David Loro Gubek, undersecretary at South Sudan ministry of energy and mining, told Reuters in an interview.
“If Khartoum insists that unless we pay they are not going to allow us to use these things, then the Republic of South Sudan… could request them to close the pipeline because it is discriminative.”
For use of its oil facilities, North Sudan has demanded fees worth a third of the export value of landlocked South Sudan. Both sides have so far failed to agree on usage fees in a row that could disrupt supplies from one of Africa’s largest producers.
Gubek said the South may seek other alternatives including building a separate oil pipeline if the North insists on fees worth a third of the export value of the new nation.
“We are not the only country exporting oil through their neighbour’s land… Why should ours be terribly high?,” Gubek said. “If we are forced, we will put in a separate pipeline.”
Khartoum is asking for $32 a barrel to use its port, the pipeline and refineries to sell the southern oil. This is worth roughly a third of South Sudan’s export value at current prices. according to Reuters calculations.
Earlier this month, Sudan halted a 600,000 barrels crude cargo from South Sudan in a dispute over customs fees, the latest in mounting tensions between the two Sudans.
STRONGER CHINESE TIES
Companies including Chinese are ready to fund deploying a separate pipeline in South Sudan, Gubek said, adding it could take about two years to connect to a pipeline in east African neighbour Kenya. But experts say such plans are years away.
“Companies including Chinese, Japanese, South Koreans and other Middle East countries are prepared to fund the pipeline up to Lamu,” Gubek said.
China vowed to support Sudan and South Sudan and help both countries develop their oil industries as Beijing is aggressively pursuing natural resources in Africa.
It has maintained close economic and political ties with north Sudan throughout a US trade embargo and now also wants to reach out to the south.
Last week, the energy and mining ministry signed a memorandum of understanding with the Chinese state oil firm China National Petroleum Corp (CNPC), Gubek said without giving further details. Sudan has also granted CNPC more oil exploration rights.
On Monday, Chinese foreign minister Yang Jiechi visited Khartoum in the first high-level visit of a Chinese official since South Sudan became independent. He later left for talks in the southern capital Juba.
“The Chinese also want to please us equally. It is the Chinese who built the pipeline and it is the Chinese who built the refinery in Khartoum,” Gubek said. – Reuters
http://www.iol.co.za/news/africa/south-sudan-threatens-to-shut-oil-pipeline-1.1117171
With South Sudan’s independence, investors eye eastern, northern Kenya
The provision of basic infrastructure is an excellent development after almost 50 years of neglect.” Ekwee Ethuro, MP for Turkana Central
The Independence of South Sudan has set the stage for a scramble for land in eastern and northern Kenya, including the northern Coast.
From the outset, Kenya’s Vision 2030 economic blueprint was premised on an independent South Sudan, with planned building of mega-infrastructure in the marginalised northern Kenya region key to driving economic growth.
The seven-component infrastructure development including Lamu Port, major highways and railway lines connecting Juba and Addis Ababa, oil pipelines, a refinery, resort cities and airports, will be concentrated in the once neglected counties of Lamu, Garissa, Tana River, Isiolo, Turkana and Marsabit.
While the construction of infrastructure will open up these areas to socio-economic development, the question policy makers are asking is to what extent the projects will disrupt the predominantly pastoral life of their people, as would-be investors are expected to invade the region in search of potentially lucrative land.
The Arid and Semi Arid Lands (ASALs) of Kenya cover more than 80 per cent of the country and are home to about 10 million people and approximately 70 per cent of the national livestock herd. They have the lowest development indicators and the highest incidence of poverty in the country.
These are areas with huge tracks of communally owned land inhabited by the pastoralists, who have a traditional system of conserving certain grazing areas for dry seasons, but which to outsiders looks like either fallow or free land. Already, Lamu residents have been complaining of increased land grabbing and speculation. Speculators are encroaching on sand dunes, the main water catchment areas for Lamu.
Head of Communications at the Ministry of Lands Mulei Muia confirmed to The EastAfrican that the ministry has received information that land buyers have started approaching individual land owners or the councils in these counties. As a result, Mr Muia said, land prices in these counties have doubled; consequently, the ministry has put an embargo on land transactions to protect trust land.
“We don’t want people to be fleeced; and we don’t want people rushing to acquire land even in areas earmarked for these projects with the intention of getting huge compensation once the projects take off,” he said.
The construction of the $4 billion Lamu port is part of the larger Northern Corridor project, which includes construction of road and rail links, an oil pipeline from the Kenya Coast to South Sudan and Ethiopia, as well as an oil refinery at Lamu. The entire plan is expected to cost $20 billion.
Lamu port, expected to be less congested than Mombasa, will provide South Sudan with its shortest link to the sea and an alternative exit point for the country’s extensive crude oil and mineral deposits. Presently, crude oil from South Sudan is refined in Khartoum and exported through Port Sudan on the Red Sea. The proposed Lamu port —with a natural deep harbour and a corresponding railway network — will have the potential of creating a land bridge across the region.
Julius Kiptarus, Director of Livestock Production at the Ministry of Livestock Development, said his department has carried out research on the likely impact on the livelihoods of the region’s pastoralists and how the department can give back in kind, such as by digging boreholes.
But he declined to give details of the report, arguing that it is still being discussed by stakeholders before its release.
But one compensating attraction of the planned Lamu port for the region is that it will handle exports of livestock to Middle East cheaply. Currently, the export of livestock through the port of Mombasa is an expensive and tedious affair involving long journeys with huge losses in between.
Also envisioned is a two-lane highway from Lamu through Isiolo to Nakodok in Turkana, airports at Lamu, Isiolo and Lokichoggio and resort cities at Lamu, Isiolo and on the shores of Lake Turkana.
There is already an ongoing scramble for land in the pastoralist areas by multinationals and foreign governments who take up irrigable pastoralist land to grow food for export, or crops for biofuels. The best example is the Tana Delta.
Lumumba Odenda, chief co-coordinator of the Kenya Land Alliance, said it is a worrying phenomenon. He argued that Kenya as the gateway for South Sudan must learn from the example of the Kenya-Uganda Railway and acquire a one-square mile belt of land on each side of the railway track.
Now with the planned standard gauge railway line, and the pipeline, more land will be required. Mr Odenda noted that the approach should not be that the government is opening up these areas at the expense of local communities, because the new Constitution and policy principles demand that they share the benefits from any investments in their traditional lands as well as ensuring their participation.
The new Constitution provides security of land rights to every citizen. It vests the community land found in most of these counties under the care of communities identified on the basis of ethnicity, culture or similar interests.
“The question is how faithful will we be to policy and to the Constitution? The indications are that these projects are going to attract a number of foreign investors. The government has the responsibility to ensure that people who will be displaced by the projects are fully compensated and their participation guaranteed,” he said.
But according to the MP for Turkana Central Ekwee Ethuro, the provision of basic infrastructure is an excellent development after almost 50 years of neglect. “I don’t see any major backlash, but if there is a single-minded pursuit of the capitalist mode of production, the people might lose their traditional way of livelihood and their humanity. However, it is a necessary evil that we must live with,” he said
But fears persist that modernity will clash with traditional as residents in the area who have stuck to their way of life for centuries resist a change from a nomadic to a sedentary existence.
In 2008, the Orma pastoralists in Tana River Delta fiercely opposed the growing of sugarcane on 40,000 hectares of coastal wetlands, because it threatened their livelihoods, and demanded to be allowed to maintain their traditional grazing lands. Nonetheless, the joint project of the Mumias Sugar Company and the Tana and Athi Rivers Development Authority went ahead.
Communities living in the arid and semi arid areas have been engaged in frequent conflicts over resources, mainly water and pasture, which have lead to deaths and destruction of property.
Northern Kenya is a vast area, one that has lagged behind in terms of physical infrastructure, such as good roads, water supply, schools and hospitals. People in these areas normally say that they live in Kenya B while the others live in Kenya A.
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