South Sudan president says oil production to remain suspended
6 min readKampala (Platts)–1Feb2012/336 am EST/836 GMT
South Sudan President Salva Kiir Mayardit has said that his country will not resume oil production and exports despite Sudan’s decision over the weekend to release two oil tankers that were detained due to a dispute between the two countries over transit fees.
Speaking at the 18th African Union Assembly in Addis Ababa, Ethiopia, late Monday, Mayardit said that oil production would remain suspended until a permanent resolution to the conflict is reached, according to a copy of his speech obtained by Platts.
The ships were freed By Sudan as a goodwill gesture in the hope that South Sudan would reverse a protest shutdown of its oil facilities, Platts reported earlier this week citing a Sudanese official.
The Sudanese government and South Sudan are locked in a bitter row in which Khartoum has been demanding that landlocked Juba pay $32.20/barrel, according to Mayardit’s speech, for the transit of oil through the only pipeline connecting South Sudan’s oil fields to export facilities located at Marsa Bashayer in Sudan on the Red Sea.
South Sudan earlier this month declared a force majeure on its end-December and January loading supply of Nile and Dar Blend crude, industry sources said previously, and was moving toward a total suspension of oil production and operations.
On January 25, South Sudan’s parliament agreed to halt oil production in the country.
In his speech Monday, Mayardit said: “We acknowledge that most of the oil infrastructure lies on the territory of Sudan, however, the oil clearly belongs to South Sudan.”
“This unilateral decision to take our crude entitlements is unmistakably a violation of the sovereignty of South Sudan and must be condemned.”
South Sudan has alleged that Khartoum blocked four ships with 3.5 million barrels of Dar Blend from sailing out of Marsa Bashayer, and have further prevented another four ships — due to load 2.8 million barrels of Nile and Dar Blend crude — from docking at the port, according to an earlier statement by Mayardit.
Mayardit said Monday that South Sudan has lost more than $850 million since Sudan began confiscating the country’s oil exports on December 8, 2011. But he reiterated that South Sudan remained committed to resolving the dispute and that it was willing to negotiate payment terms for the transit of oil.
He added that all outstanding dues and claims between the two countries should be settled through an independent transparent committee comprising three members– one each to be nominated by Sudan and South Sudan and the third by the African Union.
On January 26, South Sudan signed a memorandum of Understanding with Kenya to construct an alternative oil pipeline that would run from South Sudan’s oil fields to Kenya’s Lamu Island in the Indian Ocean. South Sudan produces around 350,000 b/d of crude oil.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7121483
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