Posts Tagged ‘Oil dispute’

Sudan's President Omar Hassan al-Bashir said tensions with South Sudan over oil transit payments could lead to war between the two countries during an interview with state TV, in Khartoum, February 3, 2012.

Photo: Reuters
Sudan’s President Omar Hassan al-Bashir said tensions with South Sudan over oil transit payments could lead to war between the two countries during an interview with state TV, in Khartoum, February 3, 2012.

A deepening oil dispute between South Sudan and Sudan has raised hostility to a point where leaders of both countries have suggested there is the strong possibility of a conflict.

Last week, Sudanese President Omar al-Bashir, speaking on national television, said his country is closer to war than to peace with South Sudan without progress on an oil deal.

His comments followed similar remarks from South Sudanese President Salva Kiir, who has warned that fighting could erupt if Sudan does not meet the south’s terms.

Dispute over pipeline transit fees

The dispute stems from South Sudan’s use of Sudan’s pipelines to transport its oil abroad. The south began shutting down its oil fields last month after accusing the north of stealing $815 million worth of southern-produced oil. Khartoum said it confiscated the oil to compensate for unpaid transit fees.

Asked about the possibility that the dispute could lead to war, South Sudanese Deputy Defense Minister Majak D’Agoot told VOA that Sudan already launched the first attack.

“Isn’t it an aggression? How could an independent state be obligated to share its resources with another country? Where does it happen?  Is it that some external force or some former colonial master is trying to continue to exercise hegemony and control over the people of South Sudan and their resources? What could be the basis for that?” asked D’Agoot.

The north and south fought a 21-year war when Sudan was a unified nation, and the sides skirmished as recently as last May in the disputed, oil-rich Abyei region.

Old scores remain unsettled

Before the current oil shutdown, South Sudan was producing about 350,000 barrels of oil per day. But without refining capacity or a port to ship it from, the landlocked country relies on pipelines that extend through the north to reach international markets.

Khartoum is seeking revenue to replace the estimated $7 billion it lost with South Sudan’s separation, in which the South took three-quarters of Sudan’s oil production.

In addition to the oil dispute, the two nations also have failed to reach a final agreement on the final demarcation of the border.

D’Agoot said the Defense Ministry is working on turning the Sudan Peoples’ Liberation Army [SPLA], a former rebel force, into a more formal, standing army to face future threats.

“Anything that stands in the way of securing the security of our natural resources, securing ourselves, securing our people, securing our land, it stands to be a source of threat,” said D’Agoot. “I don’t want to pinpoint it to any particular source, but anything that tends to threaten our core interests as a nation of course will have to be responded to.”

While D’Agoot did not want to pinpoint which nation poses the biggest threat to South Sudan’s sovereignty – outside his office, in the middle of the military base – a statue of the former SPLA General John Garang points firmly toward the north.
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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.

Khartoum – The Sudan government has accepted mediation in the oil dispute with South Sudan and is looking forward to reaching a deal, the National Congress Party (NCP) affirmed Tuesday.

“We are for reaching an agreement with the Government of the South on oil and that is why we are directly engaged in talks with southern negotiators,” Presidential Assistant and Deputy Chairman of the ruling National Congress Party (NCP), Dr. Nafie Ali Nafie said
Nafie, who was speaking to reporters said, “Our top option is to reach an agreement on this issue.”

The government’s position is that export of oil should continue, Nafie stressed indicating that oil is more important for the South than the North.

He said in the event that an agreement is not reached with the government of the South, Sudan is capable of taking its full rights in kind, expecting the South to accept final settlement, adding the final decision for halt of oil operations lies with the government of the South. ”We have no right to say that the Government of the South does not want to export its oil.”

Presidential Assistant downplayed the decision of the South to shut down oil operations, saying it has no bearing on the outstanding issues between the two countries.

With regard to the role of China and possible mediation between the two countries, he said “We welcome all efforts. China is the largest investor and has the right to make efforts to that end.”

Reacting to reports about “oil for Abyei deal” he said, “We will not accept that. Each issue will be discussed separately.” He added that if an agreement is reached on oil it would not be at the expense of Abyei. “We will foil any attempt to compromise Abyei,” he said.

On the Kenyan Mediation between President Al Bashir and Salva Kiir, Nafie said it would be good if Kenya mediates otherwise the AUHIP mediation will continue.

Commenting on the protests witnessed in Nyala Monday, Dr. Nafie downplayed the event, considering it as a minority expression of rejection of the appointment of a new governor, saying the new governor was widely welcomed in South Darfur.

He revealed that the former governor Abdul Hamid Musa Kasha has resigned for logical reasons and it was accepted, adding that a new governor for East Darfur State will be appointed soon.
He denied the resignation of Qutbi Al Mahdi, NCP political chair, but pointed out that the ruling party has made changes in all sectors and Qutbi was informed about that.

By Zuleikha Abdul Raziq, 2 hours 40 minutes ago