Sudan and South Sudan leaders bid to defuse oil dispute
7 min readThe presidents of Sudan and South Sudan are meeting in the Ethiopian capital Addis Ababa to discuss a deepening crisis over sharing their oil wealth
When South Sudan became independent last July, Sudan lost most of its oil.
However, the export pipelines go through Sudan, which has seized some $815m (£520m) in oil revenue, accusing the south of not paying transit fees.
South Sudan last week said it was suspending oil production, accusing Sudan of “stealing” its oil.
The leaders of Kenya and Ethiopia are trying to broker a deal between South Sudanese President Salva Kiir and his Sudanese counterpart – and old enemy – Omar al-Bashir.
The BBC’s James Copnall in Khartoum says the row over oil has taken the two countries’ relationship to its lowest point since South Sudan seceded.
In addition to the oil dispute, there are also tensions along the border, with Sudan this week denying accusations that it had bombed a refugee camp in South Sudan housing people who had fled a conflict across the frontier.
The two countries swap accusations of backing each other’s rebel groups.
Mr Kiir was a leading member of a rebel group which fought Sudan for two decades before a peace deal paved the way for the south’s independence.
‘Oil war’A lot is riding on the summit as if South Sudan’s threatened shutdown in oil production is completed, it would damage the already struggling economies of both countries, our correspondent says.
Some Sudanese newspapers are already calling the crisis the “oil war”, he adds.
In 2011, the South Sudanese government estimated that 98% of its total budget came from oil revenues.
African Union mediators have said that Sudan and South Sudan are not far away from returning to actual conflict.
On Wednesday South Sudan announced a deal with Kenya to build an oil pipeline linking its oil fields to Kenya’s Lamu port, potentially reducing its dependence on Sudan for exports.
Alex de Waal, who is advising the African Union mediation panel for South Sudan and Sudan, wrote this week that such a pipeline might take three years to build.
Correspondents say there are also worries about the impact of the proposed pipeline on Lamu, which is one of East Africa’s most beautiful and relatively unspoiled environments.
ADDIS ABABA — Sudanese President Omar al-Bashir and his South Sudan counterpart Salva Kiir failed to resolve a dispute over oil after day-long talks hosted by an African peace bloc Friday in Ethiopia.
The two leaders met amid heightened tensions after the South accused Khartoum of stealing $815 million worth of crude oil.
Sudan admits to taking oil from the South, but says it was to compensate for export fees and use of its refineries.
“There are some sticking points… in general terms I believe there is quite a lot of progress but not enough for us to be able to clinch a deal now,” said Ethiopian Prime Minister Meles Zenawi.
Meles is the current chair of the regional bloc, the Inter-Governmental Authority on Development. Kenyan President Mwai Kibaki, Somali leader Sharif Sheik Ahmed and Djibouti’s Ismael Omar Guelleh also attended the talks.
However South Sudan’s chief negotiator Pagan Amum said the negotiations were tense, but confirmed they would continue.
“These talks… have reached an impasse because of the intransigence of the government of Sudan,” Amum told reporters.
“The mood of course was not good because you can imagine sitting with somebody who is stealing your property.”
Juba this week began to halt oil production after it ordered a complete shutdown over the dispute with Khartoum, a former civil war foe. Over half the wells are now shut, the South says.
The leaders proposed a deal to reverse unilateral decisions by the countries and to work on signing a comprehensive agreement, Meles said, adding that the talks would continue at an African Union summit starting Sunday.
Bashir and Kiir left the meeting separately and refused to comment.
South Sudan split from Sudan in July, taking with it three quarters of the country’s oil, which makes up more than 90 percent of the South’s revenue.
Landlocked South Sudan signed an agreement with Kenya Tuesday to build an oil pipeline to a Kenyan port, potentially freeing it from its dependence on exporting oil through Sudan.
However, industry experts have said that building a pipeline could take more than three years and cost as much as $4 billion — a staggering cost for the South, where oil production is already close to peaking.
South Sudan has also approached Ethiopia to build a pipeline connecting to the Red Sea state of Djibouti.
Earlier this month, South Sudan signed its first oil deals with foreign nations since it won independence last July, inking agreements with Chinese, Indian and Malaysian firms.
The deals, which replace deals signed with Khartoum under a unified Sudan, cover oil production in the two key petroleum states of Unity and Upper Nile.
Khartoum also opened bids to international companies days after the South penned its deals.
After South Sudan gained its independence in July, Sudan, which also depends on oil, was scrambling for ways to bolster its finances.
Meanwhile South Sudan said Friday it had discovered new figures that it claimed showed the north had colluded with oil companies to provide lower production figures on paper than was actually being pumped from the ground.
“All the figures that are being given to the (South’s oil) ministry as a base for the production sharing among the partners — this was not true, it was misleading,” said Stephen Dhieu Dau, the South’s oil minister.
“We believe Khartoum is now pumping more reserves,” he told reporters in Juba, claiming figures in some cases under-reported oil production by as much as 15 percent.
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| Sudan and South Sudan leaders bid to defuse oil dispute BBC News However, the export pipelines go through Sudan, which has seized some $815m (£520m) in oil revenue, accusing the south of not paying transit fees. South Sudanlast week said it was suspending oil production, accusing Sudan of “stealing” its oil. |
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