Official: Sudan To Sign Oil Deal With South Sudan
16 min readSouth Sudan oil row: Sudan to release oil shipments and sign a deal with South Sudan
Sudan says it will release detained crude oil shipments belonging to South Sudan to help end a bitter dispute.
Sudan says it will release detained crude oil shipments belonging to South Sudan to help end a bitter dispute.
The laden vessels would be allowed to leave Port Sudan as soon as possibile, a Khartoum negotiator said.
The move followed South Sudan’s threat to halt production, as talks on the row over oil transit fees broke down.
The newly independent state currently has to use Sudan’s infrastructure to export its oil, but halting production would hurt the economies of both.
South Sudan seceded in July 2011, taking with it the lion’s share of Sudan’s oil – but without agreement on oil transit fees.
The BBC’s James Copnall in Khartoum says Sudan needs these oil transit fees to cover the gap in its budget caused by South Sudan’s secession.
It has started seizing oil in lieu of the fees.
Three ships carrying 2.2 million barrels of oil have been detained, AFP news agency says.
South Sudan has accused Khartoum of taking oil worth $815m (£518m) in total.
‘Stealing'”President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed el Khatib told a news conference in the Ethiopian capital, where talks have been taking place.
Mr Khatib said releasing the ships should open the way for what he called a “cover agreement” between the two countries to be signed – and that Khartoum was ready to do this by the end of Saturday.
There was no immediate reaction from South Sudan.
Late on Friday, South Sudan’s lead negotiator, Pagan Amum, said a deal had fallen through because Sudan was “stealing” his country’s oil.
He also said the shutdown of South Sudan’s oil production would be complete by the end of Saturday.
Oil accounts for an estimated 98% of landlocked South Sudan’s budget – but it currently has to use Sudan’s pipelines and export terminal to export the oil.
Reuters news agency cited industry sources as saying Sudan had already sold at least one cargo of crude oil seized from South Sudan at a discount of millions of dollars, and was offering more.
Sudan’s President Omar al-Bashir and his South Sudanese counterpart, Salva Kiir, have been holding talks in Addis Ababa, brokered by the leaders of Djibouti, Ethiopia, Kenya and Somalia.
Observers say the oil row has created the greatest crisis between the two states since South Sudan became independent, and has stoked fears of a return to war.
The laden vessels would be allowed to leave Port Sudan as soon as possibile, a Khartoum negotiator said.
The move followed South Sudan’s threat to halt production, as talks on the row over oil transit fees broke down.
The newly independent state currently has to use Sudan’s infrastructure to export its oil, but halting production would hurt the economies of both.
South Sudan seceded in July 2011, taking with it the lion’s share of Sudan’s oil – but without agreement on oil transit fees.
The BBC’s James Copnall in Khartoum says Sudan needs these oil transit fees to cover the gap in its budget caused by South Sudan’s secession.
It has started seizing oil in lieu of the fees.
Three ships carrying 2.2 million barrels of oil have been detained, AFP news agency says.
South Sudan has accused Khartoum of taking oil worth $815m (£518m) in total.
‘Stealing'”President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed el Khatib told a news conference in the Ethiopian capital, where talks have been taking place.
Mr Khatib said releasing the ships should open the way for what he called a “cover agreement” between the two countries to be signed – and that Khartoum was ready to do this by the end of Saturday.
There was no immediate reaction from South Sudan.
Late on Friday, South Sudan’s lead negotiator, Pagan Amum, said a deal had fallen through because Sudan was “stealing” his country’s oil.
He also said the shutdown of South Sudan’s oil production would be complete by the end of Saturday.
Oil accounts for an estimated 98% of landlocked South Sudan’s budget – but it currently has to use Sudan’s pipelines and export terminal to export the oil.
Reuters news agency cited industry sources as saying Sudan had already sold at least one cargo of crude oil seized from South Sudan at a discount of millions of dollars, and was offering more.
Sudan’s President Omar al-Bashir and his South Sudanese counterpart, Salva Kiir, have been holding talks in Addis Ababa, brokered by the leaders of Djibouti, Ethiopia, Kenya and Somalia.
Observers say the oil row has created the greatest crisis between the two states since South Sudan became independent, and has stoked fears of a return to war.
Landlocked South Sudan split from Sudan in July, taking with it three quarters of the country’s oil, but all pipeline and export facilities are controlled by Sudan.
“This oil was indeed developed when Sudan was one country and therefore all of the Sudanese people need to reap the benefit of it,” al-Khatib said.
South Sudan accuses Khartoum of stealing $815 million worth of oil. Al-Khatib said that Juba had not paid it for using the refinery since South Sudan seceded.
“We started taking the equivalent in kind of what we had been invoicing South Sudan, not a cent more,” he said.
African Union mediators have proposed an initial deal calling on the two countries to reverse their unilateral decisions before inking a comprehensive agreement later.
The oil talks come ahead of an AU summit starting Sunday. Al-Khatib said he hoped they could sign the initial agreement soon.
South Sudan’s chief negotiator Pagan Amum on Friday said the negotiations had reached an “impasse because of the intransigence of the government of Sudan.”
“The mood of course was not good because you can imagine sitting with somebody who is stealing your property,” he said of Kiir’s and al-Bashir’s meeting.
Juba this week began to halt oil production after it ordered a complete shutdown over the dispute with Khartoum, with over half the wells now shut, the South says.
China, which relies on South Sudan for nearly five percent of its oil and is also a key ally of the Khartoum government, has been supporting negotiations between the two sides.
This week South Sudan signed an agreement with Kenya 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 its independence, 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, Sudan, which also relies on oil, was scrambling for ways to bolster its finances.
Sudan says to release ships seized from S.Sudan
* S.Sudan shutting down oil output in retaliation
* Sudan now says to free ships, ready to sign oil deal
* China biggest importer of Sudanese oil (Adds Sudan denies looting oil revenue, S.Sudan reaction)
By Aaron Maasho
ADDIS ABABA, Jan 28 (Reuters) – Sudan said on Saturday it would free tankers carrying cargoes of South Sudanese crude it had seized earlier this month, in a push to defuse a row over transit fees between former civil war foes that both depend on oil for almost all their income.
Landlocked South Sudan, which became independent in July after seceding from Sudan, has to use a northern pipeline and the port of Port Sudan to export its crude, and the two countries are in dispute over the transit fees it should pay.
The row heated up this month when Sudan said it was confiscating some of South Sudan’s oil exports to make up for what it called unpaid fees. South Sudan retaliated by saying it would shut down its crude output by Saturday.
Oil is the lifeline of both countries’ economies, and the south’s secession left Khartoum with output of about 125,000 barrels per day and South Sudan with production that has fallen slightly to 350,000 bpd from 375,000 bpd in June.
Oil revenue is about 98 percent of South Sudan’s income, and is vital if the government is to develop a country devastated by years of civil war and one of the world’s poorest nations.
China is the biggest buyer of oil from the two countries, taking some 12.99 million barrels last year – five percent of overall 2011 crude imports by China, which is also the biggest investor in South Sudan’s oilfields.
“President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed El-Khatib, deputy head of Sudan’s negotiating team, told a media conference in the Ethiopian capital on Saturday.
“By taking this step, we expect the cover agreement to be signed, the shutdown to be halted, and the terms of the cover agreement to be respected,” said El-Khatib. “Before the end of today, we could be able to sign the cover agreement. We, at least, are ready to sign.”
A South Sudanese official, asked to comment, told Reuters: “We are studying the claim. We are waiting for confirmation from the shipping companies.” He did not want to be named.
LEADERS FOUND NO ANSWER
Sudanese President Omar al-Bashir and South Sudan’s President Salva Kiir met on the sidelines of a meeting of East African officials in Ethiopia on Friday, but failed to resolve their differences over the oil transit tariff.
Ethiopian Prime Minister Meles Zenawi, a broker between the two sides, met Bashir again on Saturday.
The row with Sudan has angered many in South Sudan, where independence, the result of a referendum following a 2005 peace accord, is often framed as the climax of a long struggle against political and economic marginalisation by the north.
South Sudan’s Kiir accused Khartoum of “looting” oil worth roughly $815 million and of building a tie-in pipeline to divert 120,000 barrels per day of southern oil flowing through the north.
Industry sources have said Sudan has sold at least one cargo of crude seized from South Sudan at a discount of millions of dollars to the official price charged by the South, and is offering more.
Awad Abdelfatah, undersecretary of Sudan’s petroleum ministry, denied South Sudan’s accusations of oil “theft”.
“Since the 9th of July (South Sudan’s independence day), we have opened our export line for them (South Sudan) without any hindrance,” Abdelfatah told Reuters.
“We have been sending them invoices since that time and have been patient until the 1st of December. We decided then to take our dues. We didn’t take anything more than what our invoice shows,” Abdelfatah said.
Sudan’s civil war, fought over issues of ethnicity, religion, ideology and oil, ebbed and flowed from 1955 to 2005 and caused the deaths of an estimated 2 million people. Southerners voted overwhelmingly for secession in a referendum in January 2011.
(Writing by James Macharia; Editing by Tim Pearce)
http://af.reuters.com/article/commoditiesNews/idAFL5E8CS04920120128?sp=true
1/28/2012 10:33 AM ET
(RTTNews) – Sudan will release ships carrying South Sudan’s oil cargos to end a dispute over transit fees, reports said Saturday citing an official involved in negotiations.
An official in the negotiating team, Sayed El-Khatib reportedly said Sudan is willing to sign an agreement. He expects a deal to be signed by both countries by the end of the day.
Earlier in the day, South Sudan said it will complete the shutdown of its oil production on Saturday, following a dispute with the neighboring Sudan.
The country decided to go ahead with the shutdown after talks between President Salva Kiir and his Sudanese counterpart Omar al-Bashir on Friday failed to produce a deal to end the dispute over transit fees for oil. The leaders met in the Ethiopian capital of Addis Ababa on the sidelines of the 18th African Union Summit.
South Sudan alleges that Sudan is seizing its oil, meant for export, during transit through its territory to a northern port. Sudan proposed a transit fee of $36 barrel, while South Sudan is offering about $1 a barrel. The country has reportedly accused Sudan of stealing $815 million of its oil.
At the time of declaring independence in July 2011, South Sudan gained control of nearly 75 percent of Sudan’s oil production totaling around 500,000 barrels a day. China is the leading destination for Sudanese oil exports. Both South Sudan and Sudan are heavily dependent on oil revenues.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Sudan says to release ships seized from South Sudan
By Aaron Maasho
ADDIS ABABA | Sat Jan 28, 2012 10:46am EST
(Reuters) – Sudan said on Saturday it would free tankers carrying cargoes of South Sudanese crude it had seized earlier this month, in a push to defuse a row over transit fees between former civil war foes that both depend on oil for almost all their income.
Landlocked South Sudan, which became independent in July after seceding from Sudan, has to use a northern pipeline and the port of Port Sudan to export its crude, and the two countries are in dispute over the transit fees it should pay.
The row heated up this month when Sudan said it was confiscating some of South Sudan’s oil exports to make up for what it called unpaid fees. South Sudan retaliated by saying it would shut down its crude output by Saturday.
Oil is the lifeline of both countries’ economies, and the south’s secession left Khartoum with output of about 125,000 barrels per day and South Sudan with production that has fallen slightly to 350,000 bpd from 375,000 bpd in June.
Oil revenue is about 98 percent of South Sudan’s income, and is vital if the government is to develop a country devastated by years of civil war and one of the world’s poorest nations.
China is the biggest buyer of oil from the two countries, taking some 12.99 million barrels last year – five percent of overall 2011 crude imports by China, which is also the biggest investor in South Sudan’s oilfields.
“President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed El-Khatib, deputy head of Sudan’s negotiating team, told a media conference in the Ethiopian capital on Saturday.
“By taking this step, we expect the cover agreement to be signed, the shutdown to be halted, and the terms of the cover agreement to be respected,” said El-Khatib. “Before the end of today, we could be able to sign the cover agreement. We, at least, are ready to sign.”
A South Sudanese official, asked to comment, told Reuters: “We are studying the claim. We are waiting for confirmation from the shipping companies.” He did not want to be named.
LEADERS FOUND NO ANSWER
Sudanese President Omar al-Bashir and South Sudan’s President Salva Kiir met on the sidelines of a meeting of East African officials in Ethiopia on Friday, but failed to resolve their differences over the oil transit tariff.
Ethiopian Prime Minister Meles Zenawi, a broker between the two sides, met Bashir again on Saturday.
The row with Sudan has angered many in South Sudan, where independence, the result of a referendum following a 2005 peace accord, is often framed as the climax of a long struggle against political and economic marginalization by the north.
South Sudan’s Kiir accused Khartoum of “looting” oil worth roughly $815 million and of building a tie-in pipeline to divert 120,000 barrels per day of southern oil flowing through the north.
Industry sources have said Sudan has sold at least one cargo of crude seized from South Sudan at a discount of millions of dollars to the official price charged by the South, and is offering more.
Awad Abdelfatah, undersecretary of Sudan’s petroleum ministry, denied South Sudan’s accusations of oil “theft.”
“Since the 9th of July (South Sudan’s independence day), we have opened our export line for them (South Sudan) without any hindrance,” Abdelfatah told Reuters.
“We have been sending them invoices since that time and have been patient until the 1st of December. We decided then to take our dues. We didn’t take anything more than what our invoice shows,” Abdelfatah said.
Sudan’s civil war, fought over issues of ethnicity, religion, ideology and oil, ebbed and flowed from 1955 to 2005 and caused the deaths of an estimated 2 million people. Southerners voted overwhelmingly for secession in a referendum in January 2011.
(Writing by James Macharia; Editing by Tim Pearce)
http://www.reuters.com/article/2012/01/28/us-sudan-oil-idUSTRE80R0B820120128
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RT News line, January 28
RT
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Sudan To Free Seized South Sudan Oil Ships
RTT News
(RTTNews) – Sudan will release ships carrying South Sudan’s oil cargos to end a dispute over transit fees, reports said Saturday citing an official involved in negotiations. An official in the negotiating team, Sayed El-Khatib reportedly said Sudan is …
| South Sudan oil row: Sudan to release shipments BBC News Sudan says it will release detained crude oil shipments belonging to South Sudan to help end a bitter dispute. The laden vessels would be allowed to leave Port Sudan as soon as possibile, a Khartoum negotiator said. The move followed South Sudan’s … |
| South Sudan ‘to complete shutdown’ of oil production BBC News South Sudan says it will complete the shutdown of its oil production on Saturday, after attempts to resolve a dispute with Sudan failed. The presidents of both countries held talks in the Ethiopian capital, Addis Ababa, but were not able to sign a deal … |
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