China-Malaysia oil firm rejects South Sudan accusations in oil row

Posted: February 19, 2012 by PaanLuel Wël Media Ltd. in Junub Sudan
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JUBA | Sun Feb 19, 2012 12:16pm EST

(Reuters) – Chinese-Malaysian oil firm Petrodar, the main oil operator in South Sudan, denied on Sunday it had helped Sudan seize any southern oil, after Juba accused Chinese firms of cooperating with Khartoum in a row between the two countries.

South Sudan is locked in a conflict with Sudan over oil payments.

The landlocked nation took three-quarters of Sudan’s oil production when it became independent in July but needs to export crude through a northern pipeline and a Red Sea port.

Both states have failed to agree on a fee Juba needs to pay, prompting Khartoum last month to seize at least three southern oil shipments at the Red Sea terminal. South Sudan has shut down its entire output of 350,000 bpd.

In the past few days, several southern officials have accused unspecified Chinese oil firms of helping Sudan seize southern oil.

The government started an investigation last week and threatened to expel Chinese firms if they were found guilty in cooperating with Sudan.

Petrodar, which pumped 230,000 bpd in South Sudan’s Upper Nile state until the shutdown, said on Sunday it had always complied with instructions from Juba and had no role in seizing southern oil at the Red Sea terminal.

It said it had given staff orders not to cooperate during the seizing of the three shipments which was overseen by Khartoum’s security services.

“Petrodar does not know the destination nor the buyers of the three shipments confiscated by the Republic of Sudan,” it said in a statement.

The firm also said it had always given daily updates for production and active wells after Oil Minister Stephen Dhieu Dau had questioned Petrodar’s output figures.

“The daily number of active wells varies from day to day based on operations, well maintenance and work-over activities,” Petrodar said.

Dau had said 40,000 bpd were missing at the key Palouge oil field but Petrodar blamed water separation during pumping for the difference.

Petrodar is a consortium of mainly Chinese state firms Sinpoec, Chinese National Petroleum Corp and Malaysia’s Petronas. It runs oil fields in South Sudan and also an export pipeline through Sudan.

South Sudan’s accusations have puzzled Western diplomats since China is the biggest buyer of its oil which make up 98 percent of state revenues.

Petrodar also said it would take up 40 days to six months or even longer to restart oil production, putting doubts over government statements that oil output could be restarted anytime.

South Sudan are due to resume oil talks sponsored by the African Union in Addis Ababa on Thursday but diplomats see no breakthrough as positions are wide apart.

Sudan wants $1 billion in back payments plus $36 a barrel, while Juba has said it is willing to pay around $1 a barrel.

Sudan’s President Omar Hassan al-Bashir has warned the conflict could lead to war. North and south fought for decades in a civil war that killed 2 million people.

(Reporting by Ulf Laessing; Editing by David Cowell)

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