South Sudan Wins International Court Case on Disputed Oil Cargo Against Sudan
7 min readBy Jared Ferrie – Feb 21, 2012 10:40 AM ET
South Sudan Welcomes London Court Ruling on Disputed Oil Cargo
South Sudan welcomed the ruling by a London court to withhold payment for a cargo of crude until ownership of the oil was settled with neighboring Sudan.
The ruling was a “positive thing” because it means that Sudan will not receive a share of the proceeds from the sale of oil “stolen” by the Sudanese government, South Sudan government spokesman Barnaba Marial Benjamin said today by phone from Juba, South Sudan’s capital. “We are satisfied as long as it doesn’t go to Khartoum.”
South Sudan declared independence in July, taking control of oil fields that produced about 75 percent of Sudan’s crude output of 490,000 barrels of a day.
Talks have so far failed to yield an agreement on how much landlocked South Sudan should pay to transport its oil through a pipeline across Sudan. South Sudan halted output last month after Sudan confiscated southern crude, saying it was taking it to make up for unpaid fees.
The disputed oil includes 600,000 barrels of Nile Blend that Sudan loaded onto the oil tanker Ratna Shradha on Jan. 19. Oil trader Trafigura Beheer BV, confirmed yesterday that the court ruled that all proceeds from the shipment, which it bought from Sudan and sold to Tokyo-based JX Nippon Oil & Energy Corp, remain with the court until ownership is legally established.
Sudan Foreign Ministry Spokesman al-Obeid Murawih didn’t answer his phone when Bloomberg called seeking comment.
To contact the reporter on this story: Jared Ferrie in Juba, South Sudan atjferrie1@bloomberg.net
Disputed Sudan Oil Can Unload After Court Ruling, Trafigura Says
February 21, 2012, 12:43 AM EST
By Jared Ferrie
Feb. 20 (Bloomberg) — A crude oil cargo that’s been stranded at sea because of a dispute between Sudan and South Sudan can unload in Japan after a court ruling in London, oil trader Trafigura Beheer BV said.
“We can confirm that the English court has ordered that the delivery can be made,” Trafigura, which bought the disputed cargo, said in a statement. “The court will hold all proceeds related to the cargo until ownership is legally established.”
South Sudan declared independence in July, taking control of fields producing of about 75 percent of Sudan’s 490,000 barrels a day of crude output. The division of oil resources has become a subject of contention between the two countries as South Sudan claims the Sudanese government in Khartoum is illegally selling the crude.
The oil tanker Ratna Shradha has been sitting off the coast of southern Japan since Feb. 14 and hasn’t docked, according to AISLive data compiled by Bloomberg. The ship loaded about 600,000 barrels of Nile Blend in Sudan on Jan. 19.
The tanker’s owner asked the court to rule on the matter because ownership of the cargo is disputed, said Pagan Amum, South Sudan’s chief negotiator in talks with Sudan.
“We will leave no stone unturned to recover the value of oil stolen by the government of Sudan,” Amum said. “We are encouraged by the steps taken by owners of the ship taken in the English court.”
An employee of Chambal Fertiliser and Chemicals Ltd., the Indian company that owns the ship, who answered the phone today, said nobody was available to comment. JX Nippon Oil and Energy, scheduled to take delivery of the oil, also declined to comment.
Ordered Shutdown
South Sudan ordered a shutdown of crude production after accusing Sudan of diverting fuel to its refinery, forcing companies to load oil onto ships it controlled, and blockading other shipments. Sudan said it confiscated crude to cover unpaid fees it’s owed for allowing the landlocked country to transport oil via a pipeline to Port Sudan on the Red Sea.
Sudan’s foreign ministry spokesman, al-Obeid Murawih, dismissed the dispute over Trafigura’s purchase.
“Whether we sold the oil or we not, consumed it or not, the buyers are willing to buy or rejecting — all these don’t help solving the core problem, which is reaching an oil deal between two countries,” he said by phone yesterday from Khartoum.
Dar Blend
Sudan put 1.9 million barrels of Dar Blend onto three tankers, comprised of 650,000 barrels on the Sea Sky, 750,000 barrels on the Al Nouf and 600,000 barrels on the ETC Isis, according to letters from oil companies that were provided by Amum. Sudan also loaded 600,000 barrels of Nile Blend onto the Ratna Sharada, the documents showed.
The Sea Sky and Al Nouf remain in the Fujairah area, on the coast of Sudan, according to AISLive data. The ETC Isis is located off Singapore.
The U.K. court decision for the sale to take place with the funds kept in escrow is “significant,” said Marc Mercer, an Africa associate with the Eurasia Group in London.
“The Trafigura experience makes the north’s sale of southern oil even more difficult to other such companies,” he said today in an e-mailed response to questions. “Litigation in court as well as the possibility of further proceedings should the oil be determined as stolen will be costly for all sides — financially and reputation wise.”
Sudan and South Sudan are scheduled to meet in the coming weeks in the Ethiopian capital, Addis Ababa, for the next round of negotiations on issues outstanding since the south separated. These include determining the status of the region of Abyei and disputed sections of the border, as well as agreeing on an oil revenue sharing arrangement.
Amum told reporters Feb. 15 that South Sudan will not begin pumping oil again until a comprehensive agreement is reached, which includes Sudan paying for southern oil it has confiscated.
–With assistance from Salma El Wardany in Khartoum. Editors: Raj Rajendran, Randall Hackley.
To contact the reporter on this story: Jared Ferrie in Juba, South Sudan at jferrie1@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
Disputed Sudanese oil cargo yet to unload in Japan
Tuesday, 21 February 2012
SINGAPORE
A ship carrying disputed Sudanese crude remained anchored off southwest Japan on Tuesday, despite a British court ruling giving the tanker permission to unload, three shipping sources said.
The Ratna Shradha, which is owned by India Steamship, is holding 600,000 barrels of crude oil that South Sudan says was seized by neighboring Sudan last month and which sold it at deep discount to a North Asian trader, the sources said.
The tanker has yet to receive permission to dock from JX Nippon Oil & Energy, operator of the Kiire terminal, a source familiar with the matter said.
“The ship was scheduled to discharge at the terminal, but so far we have not received any news from JX Nippon,” the source said.
The tanker has remained off the terminal since Feb. 14, according to Reuters shipping data. The docking schedule for this week does not show the Ratna Shradha unloading, a second shipping source said.
At least two traders said the cargo had been bought by JX Nippon Oil and Energy.
India Steamship, a unit of Chambal Fertilizers and Chemicals Ltd., and JX Nippon Oil, both declined to comment.
Chambal Fertilizers submitted the case to a British commercial court on Feb. 15, a court official told Reuters, after questions over the legal ownership of the crude emerged.
The defendants in the case are listed as the Republic of Sudan, the Republic of South Sudan and Union de Banques Arabes et Francaises, the official added.
Geneva-based Trafigura, the world’s third largest oil trader, bought oil which the South Sudanese government claims was seized by its northern neighbour Sudan.
Landlocked, war-ravaged South Sudan must pump oil to the Red Sea via a pipeline across its northern neighbor to Port Sudan. Oil revenues account for 98 percent of the seven-month-old country’s income.
The Ratna Shradha is one of at least three tankers that are part of some $815 million in oil revenues that South Sudan’s President Salva Kiir accused Sudan of “looting” and which the government in Khartoum said provided compensation for unpaid transit fees.
It is not yet clear if the other disputed cargoes have been sold.
Sudan has confiscated more than 6 million barrels of South Sudan’s oil since December due to the row over oil transit fees, a South Sudanese official said last week.
http://english.alarabiya.net/articles/2012/02/21/196101.html
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