Archive for January 30, 2012

 South Sudan accuses Sudan of killing 79 during cattle raid

AU leaders Monday were trying to encourage the rivals to seek a deal on the sidelines of the Pan-African bloc’s summit in Addis Ababa Photo: EPA/JACOLINE PRINSLOO
South Sudan has accused its former foes in the Khartoum government of arming gunmen who killed 79 people in a cattle raid, as the UN warned tensions between the two sides risk regional peace.

“A militia group from Unity state penetrated into Warrap state … and attacked people in a cattle camp,” said Interior Minister Alison Manani Magaya, adding 79 people had been killed, updating an earlier toll of 40.

“This militia group was armed by the government of Khartoum,” he said, adding that “mostly the women and children were killed” in the latest wave of violence in the world’s newest nation.

“More weapons are flowing in from Khartoum … particularly Unity state and Upper Nile,” he said, referring to South Sudan’s oil-producing states.

But Sudan’s army spokesman Sawarmi Khaled Saad denied the allegations, saying: “We don’t have any connection with this. We never support any armed opposition in South Sudan or any place.”

South Sudan seceded peacefully from Sudan in July after decades of war, but both countries have since repeatedly exchanged allegations that each side backs proxy rebel forces against the other.

Oil-rich but grossly impoverished South Sudan was left awash with guns after years of conflict, and brutal tit-for-tat raids by rival ethnic groups to steal cattle from each other are common.

UN chief Ban Ki-moon said on Sunday that tensions and a furious row over oil between the former enemies has become a major threat to regional peace and security.

“The situation in Sudan and South Sudan has reached a critical point. It has become a major threat to peace and security across the region,” Ban told an African Union summit in the Ethiopian capital.

Key issues unresolved at independence have escalated into bitter arguments, including a row over pipeline transit fees to transport the landlocked South’s oil to port in the rump state of Sudan.

Juba said Sunday it had nearly completed a shutdown of its oil production – the fledgling nation’s top revenue source – after it accused Khartoum of stealing $815 million of its oil, and AU-mediated talks stalled.

In addition, tensions have been raised by their still undemarcated border, parts of which cut through oilfields.

AU leaders Monday were trying to encourage the rivals to seek a deal on the sidelines of the Pan-African bloc’s summit in Addis Ababa.

The South’s oil-producing border state of Unity is a base for a number of rebel groups that Juba claims are backed by Khartoum to destabilise the fledgling nation by attacking civilians and laying landmines.

Magaya could not name the specific group responsible for the deadly weekend attacks, but claimed that rebel groups in Unity state were collaborating with one another.

“They took a lot of cattle with them,” he said, added that the gunmen were from the Nuer ethnic group, while those attacked were Dinka.

He said government teams had been sent to investigate and that the death toll could rise as local officials were “still counting the bodies.”

South Sudan is reeling from an explosion of ethnic violence, notably in Jonglei state, where a militia army of up to 8,000 armed youths attacked a rival ethnic group earlier this month, affecting 120,000 people, according to the United Nations.

The attacks were a dramatic escalation of centuries old tit-for-tat cattle raids, with aid workers reporting horrific killings, including babies beaten against trees and women hacked by machetes.

The United Nations has warned that South Sudan faces massive challenges as the world’s newest nation struggles to support hundreds of thousands of fleeing violence.

Last year, over 350,000 people were forced from their homes due to violence, according to UN figures, while since June, South Sudan has also taken in over 80,000 refugees fleeing civil war in the north.

Source: AFP

Scores dead in cattle raid in South Sudan
ABC Online
South Sudan has accused its former foes in the Sudanese government of arming gunmen who killed 79 people in a cattle raid. “A militia group from Unity state penetrated into Warrap state… and attacked people in a cattle camp,” South Sudan’s interior 

Official: South Sudan cattle raid leaves 70 dead
Nation Newsday > News > Nation Official: South Sudan cattle raid leaves 70 dead Published: January 30, 2012 7:43 AM By The Associated Press JUBA, South Sudan – (AP) — An official inSouth Sudan says more than 70 people were killed in a recent cattle 

NYMEX-US crude rises above $99 on Iran, S.Sudan
| SINGAPORE Jan 31 (Reuters) – US crude oil rose above $99 a barrel on Tuesday on concerns over supply disruptions in South Sudan and OPEC member Iran. FUNDAMENTALS * NYMEX crude climbed 33 cents to $99.11 a barrel by 0004 GMT, after falling 78 cents 

Vote for new AU commission chief ends in deadlock
On the sidelines of the summit, protracted disputes between South Sudan and Sudan brought a warning from UN Secretary General Ban Ki-moon Sunday that they threatened regional security. Ban said both Sudanese President Omar al-Bashir and his South Sudan 
South Sudan accuses Sudan of killing 79 during cattle raid
South Sudan has accused its former foes in the Khartoum government of arming gunmen who killed 79 people in a cattle raid, as the UN warned tensions between the two sides risk regional peace. “A militia group from Unity state penetrated into Warrap

Energy PS Patrick Nyoike. Last Tuesday,  Kenya signed the oil pipeline and fibre optic deal allowing South Sudan build and own a pipeline through the Kenyan territory.  FILE

Energy PS Patrick Nyoike. Last Tuesday, Kenya signed the oil pipeline and fibre optic deal allowing South Sudan build and own a pipeline through the Kenyan territory. FILE 

By ZEDDY SAMBUPosted  Monday, January 30  2012 at  21:04

Kenya and South Sudan will form a joint commission to streamline plans for the construction of an oil pipeline between Juba and the port city of Lamu.

South Sudan intends to construct a pipeline through Kenya to export its crude oil while the government would build a refinery in Isiolo to process the crude for local use and export to countries like Ethiopia.

“We do not have the money to build the pipeline. South Sudan has said it will build it but it will be jointly managed by the two countries,” said Energy PS Patrick Nyoike.

The PS said a similar arrangement would be adopted for the planned refinery, possibly on a 50:50 basis.

Last Tuesday, Kenya signed the oil pipeline and fibre optic deal allowing South Sudan build and own a pipeline through the Kenyan territory.

“We will form a joint venture on the twin projects . We have a counterproposal from Toyota Tsusho Corporation to build several multi products to Lamu and Nakuru,” he said.
Another line is planned to deliver products to the border town of Moyale to be tapped by Ethiopia. A pipeline would also be built to connect to the oil fields in Hoima in northern Uganda.

Mr Nyoike said it was possible to complete the project in a year given that the 2,000-kilometre line from South Sudan oil fields to Port Sudan was laid in 18 months.

The refinery, pipeline and fibre optic cable are part of the Sh16 trillion Lamu Port and Southern Sudan-Ethiopia Transport Corridor project.

The project includes resort cities along the corridor and airports linked via a modern railway line.

The pipeline offers South Sudan an alternative route to transport oil, which accounts for 98 per cent of its revenues while opening up northern Kenya for development.

Toyota Tsusho Corporation is planning to build a 1,400-kilometre oil pipeline under Build Operate and Transfer before handing over control of the facility to the two governments after 20 years.

The pipeline would carry a projected 450,000 barrels of oil a day from Juba in southern Sudan to Lamu on the Indian Ocean.

The estimated cost of the pipeline is $1.5 billion dollars (Sh135 billion).

“The pipeline is a gateway to move Sudanese oil to the market including Kenya. Both the crude oil line and the refinery are urgent. Our plan is to deliver both at the same time,” said Mr Sylvester Kasuku, Infrastructure specialist at Kenya’s Office of the Prime Minister.

He said Kenya would earn transit fees in line with international best practice adding that preliminary works on other aspects of Lappset such as roads and port building have started.

Landlocked South Sudan exports roughly 350,000 barrels per day but has started shutting down production after talks collapsed with Sudan over transit fees and revenue sharing.

Sudan says South Sudan has not paid for use of northern export facilities since its independence and is demanding $1 billion in fees and $36 per barrel for the crude to be exported through Port Sudan.

In the event of exports through Port Sudan being blocked, South Sudan has said the country can survive on borrowing (using its crude as collateral) until a new export avenue is created.

The recent breakdown in the talks between Sudan and South Sudan in the High Level negotiations in Addis Ababa was a big shock for Sudan and the mediators.

Oil was a major setback to the continued mediation for peace by the neighboring countries of Kenya and Ethiopia. The negotiations were headed by the African Union High-Level Panel on Sudan Thabo Mbeki – the former president of South Africa. The crux of the problem is the passage of the oil pipelines through Sudan and the non payment by the south to the north for such pipelines.
Though there seemed to be an all round consensus during the talks by both parties, the last minute turned around by South Sudan to refuse to sign the agreement apparently without giving any reason , resulted in the crumbling of all the efforts by the mediators for this deal.
The Negotiations discussed the economic file, oil, trade, and financial accounts.  The Head of the Sudanese Delegation Iddris Mohammed Abd AlGadir , who was present in Addis Ababa said that the negotiations will stop till solutions are found, he added that the negotiations will resume on the 10th of February.
Whereas Chairman of the Sudanese Oil Committee Al Zubair Mohammed Alhasan, was of the opinion that there is no cause for any concern as he was confident that a solution would soon be found as at the end of the day, both the countries were one till the recent past and it was just a matter of ironing out the creases. He added that the South want to overthrow the government by the support of the West.
Political analysts are very optimistic, they observe that both sides will reach an agreement at the end, and the mediator is playing a very big role.
South Sudan was exporting oil for about 5 months, since its separation on the 9th of July 2011through the north without paying fees for the pipelines nor the port fees.
Though an effort is on the region to ensure that peace is brokered, the sudden withdrawal by South casts many doubts whether this is a deliberate act with an ulterior motive or is just naivety which will soon be reversed. Only time will tell.


An escalation of intercommunal violence has tested the resolve of South Sudan, the world’s newest country, and that of the United Nations peacekeeping mission in South Sudan, UNMISS.

Extensive patrols by UNMISS over the past three weeks have not found the “trail of corpses” stretching “miles into the bush,” as alleged in some press reports. Parallels drawn to the genocide in Rwanda have been misleading with regard to the unfolding events and do not apply to the U.N.’s response.

Unfortunately, we have confirmed dozens of civilians killed in Pibor County. No matter the numbers, this is a human tragedy and a heavy emotional burden for all of us who have responsibility to maintain peace. The U.N. Security Council placed the highest priority on protection of civilians when it established UNMISS on July 8. And even when information is fragmented and difficult to piece together, truthful accounts of events are important.

In late December, UNMISS air patrols detected a column of nearly 8,000 armed Lou Nuer youths trekking toward Pibor County, the remote heartland of South Sudan’s Murle ethnic community in Jonglei State. Their stated aim was to take reprisals for Murle attacks on Lou Nuer communities in August that left up to 600 dead and hundreds injured. Lou Nuer and Murle hostilities date back decades, arising from competition for scarce resources and the decades-long civil war.

To address the immediate threat, the mission warned the South Sudan government of the impending attack and moved about half of its 2,100 combat-ready personnel to the population centers in the state.

The mission also gave early warning to tens of thousands of local residents. As a result, many were able to move away from towns and villages ahead of the Lou Nuer’s advance. The presence of an UNMISS battalion alongside units of South Sudan’s army (SPLA), established a defensive perimeter around much of the town of Pibor, largely shielding its population from the Lou Nuer raiders.

The peacekeepers were vastly outnumbered by the Lou Nuer marauders. Still, the SPLA and the effective positioning of the U.N. peacekeepers helped halt them from overrunning Pibor.

The Security Council commended these actions by UNMISS. Not every civilian was saved, but a much greater loss of life was averted.

Prior to the crisis, the mission had worked closely with the government in trying to prevent anticipated clashes and protecting civilians through military deterrence and active political engagement. But all violent attacks could not be prevented.

The long-standing conflict between the Lou Nuer and the Murle is far from over. In a bid to limit the damage from retaliatory Murle strikes into Lou Nuer strongholds in Jonglei, UNMISS troops have been redeployed to key locations where thousands of civilians are located.

Sadly, the chain of retaliatory violence continues unbroken, the latest target being the Dinka village of Duk Padiet, attacked on Jan. 16. The mission and the government are continuing their efforts to secure a cessation of hostilities, facilitate durable reconciliation and address the root causes of the conflict.

There are two larger lessons to be learned from the ongoing Jonglei crisis.

First, there is a need for effective government action to strengthen security presence in potential flashpoints, get the peace process off the ground, bring to justice those responsible for the attacks and establish programs that address the grievances of the communities.

Second, the United Nations and its members need to act with greater urgency in deploying the full strength of UNMISS troops to South Sudan so that the mission can exercise its mandate to the full in support of the government’s protection efforts.

The U.N. Security Council authorized a military personnel strength of 7,000, but only about 5,100 soldiers are in the country at present. Less than half of these are available for immediate deployment to the field.

UNMISS must be provided with resources and capabilities that match its mandate. Members of the Security Council expressed concern about the shortage of aircraft hampering UNMISS operations as the violence in Jonglei spiraled out of control. This lack of air assets impacts all.

The government of South Sudan has the political will to protect its citizens, but it is constrained by weak capacity in terms of rule of law, security infrastructure and assets. UNMISS, on the other hand, has a limited number of troops acting in a country where Jonglei alone is the size of Bangladesh. The difficulties of protecting civilians in this situation cannot be underestimated.

Despite these challenges, neither the U.N. mission nor the government were standing idly by during the latest crisis. Decisive action was taken to protect civilians. It is in this spirit that the mission will continue to exercise its mandate.

Hilde F. Johnson is the special representative of the United Nations secretary-general in South Sudan.

Sudan frees South Sudan’s oil tankers but row continues

Two sides unable to agree a transit fee * Oil provides about 98 percent of South Sudan’s income * Disentangling oil among list of disputes after secession (Adds Sudanese foreign minister’s comments) By Alexander Dziadosz and Hereward Holland 

Kenya, South Sudan to form team for oil pipeline project
Business Daily Africa
Last Tuesday, Kenya signed the oil pipeline and fibre optic deal allowing South Sudanbuild and own a pipeline through the Kenyan territory. FILE By ZEDDY SAMBU (email the author) Kenya and South Sudan will form a joint commission to streamline plans

In South Sudan, Old Feuds Test a New State
New York Times
An escalation of intercommunal violence has tested the resolve of South Sudan, the world’s newest country, and that of the United Nations peacekeeping mission in South Sudan, UNMISS. Extensive patrols by UNMISS over the past three weeks have not found 
Sudan frees South Sudan’s oil tankers; row continues
By Alexander Dziadosz and Hereward Holland | KHARTOUM/JUBA (Reuters) – Sudan has released four tankers loaded with South Sudanese oil in an effort to defuse a row over export transit fees, but southern officials said the move was not enough to reverse 
SOUTH SUDAN-UGANDA: Economic migrants battle xenophobia
JUBA/KAMPALA, 30 January 2012 (IRIN) – Petty traders from Uganda, South Sudan’s largest trading partner, crowd into Konyo Konyo market in Juba selling used clothes, vegetables and household wares. Lacking economic prospects at home, they come in the 
VSO appeal for education specialists in South Sudan
Ed Exec
VSO is seeking experienced education specialists to volunteer in its new programme inSouth Sudan and help future generations of children access a good education. VSO is currently recruiting primary teachers, headteachers, inspectors and education 

ReutersBy Aaron Maasho and Yara Bayoumy | Reuters 

ADDIS ABABA (Reuters) – The African Union failed to elect a new head on Monday, highlighting the weakness of a group criticized for slow decision-making during political turmoil on the continent last year.

Former South African Foreign Minister Nkosazana Dlamini-Zumawas up against incumbent commission chairman Jean Ping of Gabon, who failed to win an outright majority in four rounds of voting.

The commission is the AU secretariat’s top organ and the chair its public face.

Smaller countries said Zuma’s candidacy broke an unwritten rule that the continent’s dominant states do not contest the leadership. “South Africa’s decision to do so turns everything upside down,” a West African delegate said.

“You could say they may have not voted for Ping but the smaller countries are skeptical of the big countries,” he said.

Analysts said Ping’s attempts to juggle the diverse views of its 54 members had hampered decision-making on Libya after the overthrow of Muammar Gaddafi.

“The weakness that Jean Ping had was not being forthcoming in putting his own opinion… the commission is a bureaucracy and it doesn’t have its own position but that of member states,” Mahari Taddele Maru, an African Union analyst at International Security Studies said.

The AU recognized the National Transitional Council as Libya’s de facto government long after most European nations, the U.S. and Nigeria. A Libyan delegate, describing the AU as “indecisive up to the last moment,” said the commission should be given more authority.

A member of the AU’s communications team said after hours of deliberation in the new Chinese-built AU headquarters in the Ethiopian capital that Ping had won 32 votes in the last round, four short of the number needed for a majority.

The African Union has not yet made an official announcement.


South Africa, which has complained the United Nations needs to pay more attention to the pan-African body, especially when it comes to African crises, had pushed Zuma’s candidacy hard, saying the AU needed the strong leadership she could give it.

“The incumbent could not win a two-thirds majority after four rounds so this is very very clear, that leaders of this continent want change and they want it now,” said South African Foreign Minister Maite Nkoana-Mashabane.

She said the rules dictated that the deputy chairman, Kenya’s Erastus Mwencha, would become interim chair until the next round of elections that would probably take place in six months at the next summit in Malawi.

South African President Jacob Zuma’s failure to secure a majority for Dlamini-Zuma, his ex-wife, after Ping’s much criticized tenure dealt a blow to South Africa, which regards itself as an emerging power championing African causes, but is seen by some other states as a step behind global affairs.

Envoys at climate talks in Durban last year criticized the largest economy in Africa for failing to get delegates to agree on a deal before two weeks of talks ended.

Pretoria also blocked a visit by the Dalai Lama to attend the 80th birthday of South African hero Desmond Tutu.

“President Zuma has been criticized for a weak foreign policy on Africa so he had to show his direction. This will be a crisis for him, that his first attempt to come up with a way to repair his policy has been defeated,” Maru said.

(Writing by Yara Bayoumy; Editing by Duncan Miriri and Philippa Fletcher)

By Florence Tan

SINGAPORE (Reuters) – The shutdown in Sudanese oil supply could drive up already record premiums on spot crude markets as top Sudan customers China and Japan scramble for alternatives even as they weigh the impact on oil flows of international sanctions on Iran.

South Sudan has shut down its oil output, estimated at around 350,000 barrels per day (bpd), as it and neighbour Sudan row over how to disentangle their oil industries, borders and debt.

Before the shutdown, China imported most of that volume, bringing in around 260,000 bpd in 2011, according to Chinese customs data. That loss, in addition to cuts China has made in imports from Iran as Beijing and Tehran bicker over contract terms, has left China looking for alternatives equivalent to around 10 percent of its imports, or around 545,000 bpd.

“It will be a challenge to try to meet the shortfall in supply due to this sudden disruption as the overall quantity is not really that small,” said Victor Shum, senior partner at oil consultancy Purvin & Gertz said.

“Overall this is a tighter supply situation for Asian refiners.”

The regional spot market is unlikely to provide much relief because of limited availability due to a spurt in demand from Japan for power generation after a devastating earthquake crippled nuclear facilities last year.

The supply disruption has added to the rally, boosting spot premiums for March to a record. It could drive prices even higher — although any rise may be tempered by refinery maintenance in the second quarter.

Sudan on Sunday released vessels loaded with South Sudanese oil, but has yet to agree to more exports from the terminal.

The shutdown by South Sudan in protest has cut off supplies to equity holders China National Petroleum Corp (CNPC), Malaysia’s Petronas and India’s Oil & Natural Gas Corp.

“We expect some disruption in loading schedules with the production shutdown,” an official with one of the equity holders said. “We hope for a resolution soon.”

The heavy sweet grades — Nile and Dar Blend — produced in South Sudan are preferred in Japan for power production and by Chinese refineries. They are often blended to reduce sulphur content in fuel oil, a residue output from refining crude and mostly used for running ships, for sale to power utilities in markets such as Japan and Taiwan.


Overall, the Asia-Pacific region is net short of crude as output from aging fields in Indonesia and Vietnam declines and as producers divert output to meet rising domestic demand.

To make up for the loss from Iran, China has already been buying extra spot crude from Russia, West Africa, Middle East and also Vietnam in January and February.

“The disruption to crude imports from South Sudan has added to the reduction China has made in Iranian imports early in this year,” Roy Jordan, London-based analyst from FACTS Global Energy said. “That means it will have to look to other exporters in the Middle East and Atlantic Basin for replacement crudes.”

China has bought 10 percent more heavy sweet Angolan crude in March, pushing spot premiums for the highly acidic and heavy sweet Dalia — similar to Sudan’s Dar Blend in quality — to a premium from a discount, a trader said.

Australian heavy sweet grades are a good substitute for Sudan, but exports typically fall during the cyclone season every first quarter. Cyclone Iggy disrupted output last week as producers shut several oil fields offshore Western Australia.

China’s imports from Australia rose 42 percent in 2011 to 81,939 bpd, and gained 25 percent to 17,140 bpd from Vietnam.

China’s Unipec has increased spot imports of Russia’s ESPO to three cargoes a month while it recently bought February Urals crude as the arbitrage window opened.

Compounding problems for China is Japan’s additional demand for crude. The world’s third-largest oil consumer has been regularly snapping up the bulk of medium to heavy sweet crude from Vietnam and Indonesia, leaving little for the spot market.


Alternatives Japan may be looking for include Gabon’s Rabi Light crude and low-sulphur fuel oil, oil economist Osamu Fujisawa said. It has already started testing Rabi Blend, importing 600,000 to 1.2 million barrels a month from July.

Japan imported 48,847 bpd of Sudanese crude in the first 11 months of last year, up from 44,294 bpd in 2011. JX Nippon Oil & Energy and Mitsubishi Corp are the key importers.

Sudan is the second-largest supplier of sweet crude to Japan after Indonesia. Japan burns the oil at power plants.

FACTS Global Energy estimates Japanese crude purchases for use at power plants will be 200,000 to 300,000 bpd in the second quarter, rising from about 150,000 bpd now.

“Nile Blend is very popular for certain power plants in Japan as they form the baseload for thermal power generation,” a trader with a Japanese firm said. “It would be tough to replace the crude as any change in quality could affect the machinery,” he said.

Asia is importing record volumes of West African oil this year, rebuilding stocks after relatively low shipments in December, Reuters calculations showed.

A drop in Brent’s premium to Dubai to below $3 a barrel widened the arbitrage window, allowing more crude to flow from the Atlantic Basin to Asia.

“Overall, the Sudan volumes are not much in a global scale,” said Natalie Roberston, an analyst at ANZ. “But they are adding to the overall sentiment in a market worried about supply disruptions.”

© Thomson Reuters 2012 All rights reserved

KHARTOUM – Tensions escalated between Sudan and South Sudan as the African Union’s (AU) efforts failed to settle the oil dispute that has engaged the two sides since last July when the south separated from the north.

Just one day after Khartoum said it had released three South Sudan’s oil ships held at Port-Sudan, Juba said it had halted oil pumping and would not resume it until an agreement with the north is reached.

“Crude oil pumping has been halted we will not resume the operation until a comprehensive agreement, settling all outstanding issues, is reached,” South Sudan’s Deputy Minister of Petroleum Elisabeth James told Xinhua Monday.

“The Addis Ababa negotiations, under the patronage of the AU, have failed to come to a settlement on the oil dispute. Therefore, we have decided to implement the decision of the Council of Ministers to stop the crude oil pumping,” she added.

The deputy minister reiterated that the South Sudan government is open to any solutions that are satisfactory for both sides, denying that there were political motives behind Juba’s adherence to reaching a comprehensive agreement before resuming oil pumping.

“The oil issue is legal and not political. We are looking for an agreement that tackles the difference over the fees set to transport the south’s oil through the pipelines of the north. This agreement should comply with the international standards,” she said.

She further downplayed Khartoum’s decision to release the oil ships, saying “this move is not enough to resolve the issue and we do not think it represents a good will initiative. For us, it is a right returned to their owners.”

The South Sudan government on January 20 decided to stop oil production after Khartoum started holding part of the south’s oil as compensation for what it calls Juba’s unpaid arrears.

South Sudan earlier also announced that it signed a framework agreement with Kenya to build an oil pipeline leading to the Kenyan port of Lamu, which would reduce its reliance on Sudan’s facilities.

Analysts said that there are the recent developments of the oil dispute are politically motivated and the external factors are not helpful in resolving the issue.

Mohamed Al-Nayer, a Sudanese political analyst, told Xinhua that “the South Sudan government may be seeking to escalate the oil issue and some powerful countries are supporting its stance.”

The south’s decision is clearly targeting the north and its economy and some people are instigating Juba not to agree with Khartoum, he noted.

“The recent round of negotiations in Addis Ababa has revealed that Juba is unwilling to end the oil dispute,” said the analyst, referring to Juba’s last-minute back down from an AU-brokered agreement.

After separating with South Sudan in July 2011, Sudan lost two thirds of its oil resources. The two sides have since been arguing about an oil-sharing deal.

JUBA/DUBAI | Mon Jan 30, 2012 4:52am EST

(Reuters) – Sudan released tankers loaded with South Sudanese oil that had been held at Port Sudan in a row over export transit fees, days after Khartoum seized crude from its new neighbor and offered it at a steeply discounted price.

Sudan’s Oil Minister Awad al-Jaz said the release came as part of efforts to reach an agreement with South Sudan on the transit fees, but so far “we don’t have any positive response from the other side.”

South Sudan has shut down oil output in protest at the seizing of the cargoes, and talks between the two to reach a settlement broke down over the weekend.

The former civil war foes have failed to agree the value of the fee landlocked South Sudan should pay to pump oil north by pipeline for export from Port Sudan.

“The four ships that were being detained were released yesterday at 5:00 p.m.,” South Sudan’s Minister of Petroleum and Mining Stephen Dhieu Dau said by telephone.

“They were carrying oil for Vitol and Sinopec.”

He added that 3.5 million barrels have been released but Sudan should now allow 5.4 million barrels to be lifted, indicating that the dispute was far from resolved.

“The ships are waiting,” said Dae. “If they want to negotiate in good faith with us they should allow us to come and lift it.”

The ships that have been released were already loaded and Sudan had held them from sailing. Separately, Sudan has sold off at least one tanker of crude seized from the South and has offered two other cargoes.

In addition to the three, at least seven tankers are still waiting at the port to lift December and January cargoes, raking up demurrage costs of $20,000-$22,000 per day, traders and shipbrokers said.

Two of the tankers that were freed were chartered by oil trading giant Vitol, an industry source told Reuters.

“The two tankers were freed on Sunday and they are carrying a total of 1.6 million barrels,” said the industry source, declining to be identified because he is not authorized to talk to the media.

Oil is the lifeline of both countries’ economies. The South controlled about 350,000 bpd of oil output when it became independent in July under a 2005 peace agreement that ended decades of civil war.

Oil provides about 98 percent of South Sudan’s income and is vital for developing an already poor country devastated by years of civil war.

China is the biggest buyer of oil from the two countries and the biggest investor in South Sudan’s oilfields.

(Reporting by Amena Bakr in DUBAI and Hereward Holland in JUBA; Editing by Manash Goswami)

By the CNN Wire Staff
January 30, 2012 — Updated 1031 GMT (1831 HKT)
The visit to Beijing by President Omar al-Bashir (L) last year was a sign of the growing ties between Sudan and China.
The visit to Beijing by President Omar al-Bashir (L) last year was a sign of the growing ties between Sudan and China.

  • The workers are in good condition, the news report says
  • It did not mention the fate of the other 56 workers who were also kidnapped
  • The attack took place at a construction site in a remote area

(CNN) — The Sudanese army has freed at least 14 Chinese nationals who were kidnapped in the volatile South Kordofan state, the official Sudan News Agency said Monday.

The news agency quoted Ahmed Haroun, the state governor, as saying the workers were taken to neighboring North Kordofan and were in good condition.

The report did not mention the fate of the other 56 construction workers who militants had also captured when they attacked a construction site in a remote area Saturday.

At the time, Alsawarmi Khalid, spokesman for the Sudanese armed forces, blamed the attacks on the Sudan People’s Liberation Movement -North, a rebel force in the border region with neighboring South Sudan. Khalid said a total of 70 workers were kidnapped in the incident — a mix of local and foreign workers.

China’s Xinhua news agency confirmed the release, but reported that 17 — and not 14 — Chinese workers were evacuated to “safe places” by Sudanese forces. That leaves 12 Chinese workers unaccounted for, the Chinese embassy in Sudan told Xinhua.

It was unclear why the two official accounts varied in the number of Chinese nationals freed.

South Sudan became the world’s newest nation last year after decades of conflict with the north.

International concern has grown over the violence in South Kordofan and nearby Blue Nile states, which has forced hundreds of thousands to flee their homes.

The region is a Sudan territory, but straddles Sudan and South Sudan’s ethnic and political lines.

China is Sudan’s largest trading partner, while Sudan is China’s third-largest trading partner in Africa. According to the Chinese foreign ministry, trade between the two countries reached $8.63 billion in 2010, an increase of 35.1% compared to the previous year.

The close bilateral cooperation is mainly driven by oil exports from Sudan, which is among the top oil suppliers for China.

January 29, 2012 (KHARTOUM) – A group of 700 military officers from Sudan’s Armed Forces (SAF) confronted president Omer Hassan al-Bashir and his defense minister Abdel-Rahim Mohamed Hussein with several demands that focused on military and political reforms, Sudan Tribune is told.

JPEG - 26.4 kb
FILE – Sudanese President Omer Hassan al-Bashir (C) and Defense minister Abdel-Rahim Mohamed Hussein (L) salutes at a military function in Khartoum (AFP)

Multiple army sources who all spoke on condition of anonymity because of the sensitivity of the issue said that the officers included those stationed in the Sudanese capital Khartoum and other parts of the country.

The message was delivered last week to Bashir and Hussein during their briefing sessions with SAF senior army officers who listened to the pair calling on them to prepare for the possibility of a full-scale war with South Sudan.

But the sources said that the SAF officers at the briefing were all but appalled at the prospects of heading to war with Sudan’s southern neighbor given the state of the military at this point.

The officers called on Bashir and Hussein to urgently address the challenges faced by the SAF emphasizing that the army has been unable to decisively overcome the rebels in the border states of Blue Nile and South Kordofan.

The Sudanese army is battling rebels from the Sudan People Liberation Movement North (SPLM-N) in the two states since June 2011 in South Kordofan and September 2011 in Blue Nile. Khartoum persistently accuses Juba of providing aid to the rebels but South Sudan routinely denies the charge.

This week the second Vice-President of Sudan, Al-Haj Adam Youssef was quoted by local media as threatening to go after SPLM-N rebels even if they had to go all the way to Juba.

“If necessary, Juba is not far,” he told the paper during celebrations of Sudan’s independence in the central state of Al-Jezira.

SAF needs “tremendously huge efforts” in order to prepare for future dangers particularly at a time when there is talk about foreign intervention, Bashir and Hussein were told.

The officers also urged Bashir and Hussein combat “rampant” corruption within the army and gave an example of 200 battle tanks that were bought in early 2010 but most of it turned out to be defective and a large number had to be sent to neighboring countries for repairs.

They noted that several senior officers objected to the “subpar deal” involving these tanks before they were bought which led to the sacking of Hussein’s chief secretary Maj. General Al-Na’eem Khidir and other senior officers including Maj. General Ahmed Abdoon who headed the Nyala army division and Maj. General Al-Tayeb Mosbah of El-Fasher army division.

The SAF officers also implored on Bashir and Hussein to implement segregation between the ruling National Congress Party (NCP) and the army so that the latter does not shoulder the mistakes of the NCP and become vulnerable to volatility of the Sudanese politics.

Furthermore, they said that is imperative that the system of government be reformed because the status quo jeopardizes the country’s national security.

One of the sources underscored that the current political climate in the form of tensions between the Islamists and the NCP has spread into the army but declined to provide details.

He described Bashir and Hussein as “rattled” by the officers’ complaints.

Eric Reeves, a researcher at Smith College who writes extensively on Sudan, believes oil is a major factor in this move.

“This may well be a dismayed response to the clear possibility that Khartoum never wanted to make a deal about oil revenues with Juba. Rather, the goal was to create a casus belli, by which the army would seize the oil regions of the South and restore all oil revenues to a northern economy that continues in a politically dangerous tailspin” he said.

This month a number of memos have surfaced allegedly sent by the Islamist base calling on the NCP to implement political reforms and fight corruption.

One of them was presented in late 2011 by Bashir’s adviser Ghazi Salah al-Deen in his capacity as the leader of the NCP parliamentary bloc.

The Sudanese president responded vaguely to some of the demands contained in Ghazi’s memo while saying that it is “premature” to address the others.

Sudan is facing a growing economic crisis that was aggravated by the secession of the oil-rich south which took with it 75% of the country’s crude reserves.

Since then, Sudan’s oil revenues, which used to make up 90 percent of the country’s exports and were the main source of hard currency inflows, have largely dried up.

The government has already banned many imported items to preserve its foreign currency supply.

The Sudanese pound lost a significant amount of its value against the dollar as a result and the black market has flourished despite government warnings.

Khartoum is trying to walk the fine line between the need to cut government spending and cutting subsidies on basic goods and petroleum products which they fear might trigger social unrest.

Last year the governor of Sudan’s central bank Mohamed Khair al-Zubeir said that fuel subsidies need to be removed because they are a huge burden on the economy.

“Subsidies are a big burden for the state. The biggest subsidy is for fuel,” al-Zubeir said, adding that a barrel of fuel was sold locally at $60 compared to a market price of $100.

“So far we didn’t notice the difference, subsidies were no problem because the country had oil … [but] we cannot pay this anymore,” he added.

The landlocked South Sudan has been in talks with Khartoum on the fair fee that should be assessed for using the north’s refineries and pipelines. It has been reported that Sudan asked for $32 per barrel for the service, something which South Sudan vehemently rejected saying it is excessive compared to international norms.

Sudan retaliated to the slow pace of talks and decided to seize part of South Sudan’s oil as payment in kind for the exporting service. Juba responded by shutting down its oil production.


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