South Sudan accuses Sudan of stealing 120,000 barrels of oil a day; talks open in Ethiopia
7 min read
Peter Heinlein | Addis Ababa, Ethiopia
South Sudan on Tuesday accused its northern neighbor Sudan of stealing more than 2.1 million barrels of oil, and warned buyers and shippers that they might face prosecution. The accusation has cast a pall over a new round of talks on sharing oil revenues.
South Sudan’s chief negotiator at the African Union-mediated talks accused the Khartoum government of confiscating and selling southern oil, saying it is creating an economic and political crisis.
The oil is shipped from landlocked Southern Sudan by pipeline to Port Sudan, where it is loaded onto ships for export. The two countries produce about 500,000 barrels of oil a day.
Disputed oil transit fees
The Khartoum government this week said it would take part of the south’s oil as compensation for transit fees, pending settlement of their dispute over how much the payments should be.
Southern negotiator Pagan Amoum on Tuesday showed reporters documents indicating that the north has seized three oil shipments in recent days worth more than $200 million. He said the action threatens to end the north-south talks.
“The government of Sudan, as we speak, has completed loading the stolen oil onto its vessels that now have cargo of stolen oil of South Sudan. This represents some $140 million of property of the people of South Sudan being taken away. And if you add the 750,000 [barrels] that may be starting to be loading today or tomorrow morning, it will amount to $215 million. This is an act of state piracy,” said Amoum.
Oil-revenue sharing disagreement
As the talks were set to begin on Tuesday, the two sides remained far apart over the amount of oil revenue to be shared. The south has offered to pay a transit fee of less than $1 a barrel; Khartoum is asking for more than $32 a barrel.
Amoum said the north has blocked southern oil from leaving Port Sudan since December 25. He told reporters that Sudanese President Omar al-Bashir is risking a return to war by refusing to negotiate in good faith.
“President Bashir has become a danger to regional peace, and he’s taking all what he wants whenever he wants at whims. This is not the way a responsible state within the international community operates, especially one that is trying to normalize relations with so many of the countries of the world. The government of Sudan has made clumsy pretexts in a thinly veiled attempt to justify its thievery,” said Amoum.
South Sudan’s warning
South Sudan Justice Minister John Luke warned that anyone buying stolen oil would be held responsible. He said investigations have already identified the companies that are purchasing the confiscated oil.
“We also would like to put the companies that are buying this illegally gotten oil of Southern Sudan from the government of Khartoum to a be on legal notice that this is the property of the Republic of Southern Sudan. And by dealing it and purchasing it, they are purchasing property to which the government of Sudan does not have any legal title and for that matter they will be subject to litigation,” said Luke.
Oil is considered the backbone of the economies of Sudan and South Sudan. The south took more than 70 percent of the region’s oil resources when it broke away from the north last July. But the oil can be exported only through the north.
China is the biggest investor in South Sudan’s growing oil sector, and the largest consumer of Sudanese crude.
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South Sudan accuses Sudan of stealing 120,000 barrels of oil a day
By Associated Press, Published: January 17
Dau’s accusation comes just days after the government of Sudan announced that it was taking southern oil in lieu of pipeline transit fees it says the south is not paying. Oil officials in Khartoum said they began taking southern oil in December, but would not specify how much oil was being taken.
Dau said the seizures at Port Sudan coupled with the oil taken from the new pipeline amounted to nearly all of South Sudan’s shares of oil pumped from its territory.
“This is a crime and it is a threat to peace and security,” said Dau.
The two countries were to begin negotiations on Tuesday in Ethiopia primarily over the transit fees that South Sudan will pay to use the northern pipelines. South Sudan has offered to pay an average of $0.70 per barrel for the use of the two pipelines, but Khartoum has asked for $36 per barrel.
Khartoum’s chief negotiator Sabir Mohammed Al-Hassan said Sunday the figure includes other fees that South Sudan will be required to pay, such as transportation fees, a transit fee, and a marine terminal fee.
But South Sudanese officials say the levies amount to theft. Dau warned that the south would take legal action against any foreign oil companies caught buying “the stolen oil.”
Pagan Amum, the secretary general of South Sudan’s ruling party, said on the sidelines of scheduled oil talks in Ethiopia that the theft of billions of dollars worth of oil by Sudan would probably cause the talks to collapse.
“Sudan should take note that the south’s patience is close to reaching its expiration period,” Amum said.
Amum said that Sudan is stealing oil “that would be the equivalent of purchasing two new pipelines a year, every year.” Amum said an oil company on Monday alerted the south’s government of another 750,000 stolen barrels worth $140 million.
Amum said the north has repeatedly threatened oil companies to load southern oil into its vessels. Copies of letters that backed these claims were distributed to journalists at a news conference.
Despite the difficulties, South Sudan is trying to expand its oil industry. Last week it signed its first post-independence oil deals with the state petroleum companies of China, India and Malaysia for oil-producing concessions in Unity and Upper Nile states. The agreements replaced exploration and production agreements made previously with the government of Sudan.
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Associated Press reporter Luc van Kemenade in Addis Ababa, Ethiopia contributed to this report.
Copyright 2012 The Associated Press. All rights reserved.
Sudan – South Sudan Negotiations Resume
Written by: MISNA
Economic issues, primarily the division of oil revenues, are expected to dominate today in Addis Ababa the negotiations between Sudan and South Sudan on the issues left unresolved since independence in Juba, said the minister and presidential adviser Mohamed Abdul-Gadir.
According to the Sudanese representative, quoted by the official press “SUNA” during talks mediated by the African Union, South Sudan will be asked to pay six billion dollars in arrears to the use of pipelines oriented toward the Red Sea.
The division of Sudan in July last year has necessitated a new compromise on oil revenues after the expiry of the peace accords of 2005 which provided for a division on an equal basis.
The oil is mostly concentrated in the southern oil fields, but it can only be sold and delivered to international markets via the pipelines linking the oil to the north.
Khartoum is seeking payment of a transit fee of USD35 per barrel, while Juba is offering 74 cents with the addition of an initial allocation of two and a half billion dollars.
The tensions between the ‘Sudans’ grew over the past weekend, with Khartoum announcing that it had taken and sold 650,000 barrels from the south. In addition to oil, in the Ethiopian capital until next Monday, there will be a discussion over foreign debt and trade agreements.
A key issue on a humanitarian level risks being ignored, in a period characterized by a series of other armed clashes. The enduring conflict along the borders of two countries: the legal status of some 700,000 South Sudanese migrants, who, in the absence of an agreement, in April could be expelled from Khartoum and other northern regions where they have worked and lived or years.
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