South Sudan pins hopes for growth on pipeline as Sudan, South Sudan locked in contentious oil talks
7 min readThe economy of South Sudan, the world’s youngest nation, which draws 99 per cent of its income from oil, is set to grow as plans for a pipeline bypassing the north progress.
Construction on a pipeline allowing South Sudanese oil to circumvent the north could start by July, boosting the fledgling nation’s revenue and global oil supplies.
South Sudan has signed a memorandum of understanding with Ethiopia to build an oil pipeline running through Djibouti, and the government is in talks with a Texas pipeline construction company to start work in six months, said Barnaba Marial Benjamin, South Sudan’s information minister. He did not identify the Texas company.
The plan for a pipeline through Ethiopia is the latest floated by the South Sudanese government in recent months. Another plan envisaging a pipeline snaking through Uganda to the Kenyan coast was under consideration by companies including Japan’s Toyota and the French oil major Total, which holds exploration blocks in South Sudan.
“We had to look for alternative route for exporting the oil after we have reached a deadlock with Sudan, which is exaggerating in the oil transit fees,” Mr Benjamin told the Chinese state news agency Xinhua recently.
Khartoum and the southern capital, Juba, have been embroiled in a dispute over oil export payments since South Sudan gained independence in July.
South Sudanese oil reaches international markets by only one conduit: the Greater Nile Oil Pipeline, which runs through Sudan to a port on the Red Sea.
Khartoum wants US$6 (Dh22) for every barrel of oil transported through the pipeline, while Juba is willing to pay only $1 a barrel and says Khartoum should also provide it with $2.4 billion in financial aid and withdraw its troops from Abyei, a flashpoint region on the border between the north and the south.
Last month, South Sudan halted its 350,000 barrels per day (bpd) oil production.
The shutdown has squeezed global crude supplies in a time of reduced output from Yemen, Syria and Libya.
http://www.thenational.ae/business/energy/south-sudan-pins-hopes-for-growth-on-pipeline
Sudan, South Sudan locked in contentious oil talks
Cape Town (Platts)–13Feb2012/510 am EST/1010 GMT
Sudan and its neighbor South Sudan are locked in talks on a dispute over oil revenues and transit fees in the Ethiopian capital Addis Ababa that have raised bilateral tensions and threaten to unravel a peace deal.
In a press release published in local media on Monday, Khartoum said Juba had discussed resuming exports through Sudan “as soon as the two sides reach a commercial agreement.”
The leaders of both countries failed to agree on a deal to end an oil dispute during the last round of talks, mediated by the African Union. Last month, the south cut off oil output after it accused the north of stealing $815 million worth of its oil.
Both Sudan’s President Omar al-Bashir and South Sudanese President Salva Kir have in recent days hinted that the two former civil war foes may be close to war.
As the dispute drags on, South Sudan last week signed a memorandum of understanding with Ethiopia to build an alternative pipeline to the port of Djibouti. South Sudanese Information Minister Barnaba Marial Benjamin was quoted as saying a Texas-based company could build the pipeline in six months.
South Sudan took three quarters of Sudan’s oil when it gained independence last July as part of a comprehensive peace agreement reached in 2005. But the south has little infrastructure and relies on northern pipelines to export its oil. Khartoum has demanded $32/barrel in transit fees while Juba has offered $1/b.
The two sides did sign a “treaty of non-aggression” on their disputed border Friday, chief negotiator of the Addis Ababa talks Thabo Mbeki, the former president of South Africa, told reporters.
According to the pact, the two sides agreed to show “respect for each other’s sovereignty and territorial integrity” and to “refrain from launching any attack, including bombardment.”
Negotiations between the two neighbors have been marred by eruptions of violence along the border, including in the contested Abyei and Blue Nile states.
–Jacinta Moran, jacinta_moran@platts.com
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7197527
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