Posts Tagged ‘port sudan’


South Sudan wants alternative oil pipelines

By Edith M. Lederer

Associated Press / February 20, 2012

 UNITED NATIONS—South Sudan’s acting U.N. ambassador said Monday his country wants to build alternative pipelines through Kenya, Ethiopia and Djibouti to ship oil while trying to resolve a dispute with neighboring Sudan over fees for using its pipelines.

Landlocked South Sudan, which became independent from Sudan in July, shut down oil production Jan. 28 after accusing Khartoum of imposing extortionate fees and stealing $815 million of its oil revenue. A research note from Commerzbank last month said South Sudan was producing about 350,000 barrels of oil per day.

The countries split without resolving what to do with the coveted oil reserves. About two-thirds of the oil is in South Sudan, but the newly independent nation has been reliant on Sudan’s pipelines to export the oil through Port Sudan.

South Sudan envoy David Buom Choat said in an interview with The Associated Press that memorandums of understanding were signed with Kenya in late January for a pipeline that would go to the Indian Ocean port of Lamu and with Ethiopia and Djibouti in February. That pipeline would go from South Sudan’s Upper Nile state through Ethiopia to a port in Djibouti, he said.

“It’s starting the technical cooperation to build pipelines through those countries,” Choat said.

He said South Sudan is continuing negotiations with Sudan on the use of its pipelines but “it’s not going too well.”

“We are faithfully negotiating with them but they are not really negotiating in good faith,” Choat said. “They have put their efforts and mentality on cheating us or getting more than we can get from our own oil.”

Sudan has asked for $32 per barrel of oil shipped through its pipelines while South Sudan has offered $1 per barrel, an amount which the country’s information minister, Benjamin Barnaba Marial, has said is “the highest in the world.”

While South Sudan is losing massive amounts of money by shutting down its oil industry, Sudan is losing money as well — and it risks losing future revenue if the alternative pipeline routes South Sudan is planning are completed.

Almost all of South Sudan’s government revenue — 98 percent of it — comes from the oil sector.

Choat said the government is taking “austerity measure” by cutting government expenditures, increasing agricultural production which is a non-oil revenue source, and making sure taxes are collected.

Sudan and South Sudan have a host of other unresolved issues in addition to oil revenue including the demarcation of the north-south border and the status of the disputed Abyei region.

The two countries signed a memorandum of understanding on non-aggression in Ethiopia on Feb. 10, but days later South Sudan accused Sudan of bombing the border town of Jau.

On Friday, Sudan’s U.N. Ambassador Daffa-Alla Elhag Ali Osman accused South Sudan of harboring the remnants of rebels from the Darfur conflict in western Sudan. He urged the Security Council “to put pressure on the government of South Sudan not to assist the armed groups who are hosted now in South Sudan.”

Choat said South Sudan has told Sudan “that we are not harboring armed groups from Sudan in our territory — that includes from Darfur or anywhere because we have a policy of non-interference in the affairs of any other sovereign state.”

He called on the Security Council to demand that Sudan stop bombing South Sudan territory, including Jau and Bahr el Ghazal, and accused Khartoum of supplying arms and weapons to militia that are against South Sudan.

“Sudan should focus on solving its own problem rather than accusing South Sudan for no reason,” Choat said.

http://www.boston.com/business/articles/2012/02/20/south_sudan_wants_alternative_oil_pipelines/

South Sudan: UN urges ethnic groups to show how to ‘make your own peace’
UN News Centre
The top United Nations official in South Sudan has urged warring ethnic communities in the country to find peaceful solutions to their disputes and to serve as an example to other groups about how to turn challenges into opportunities…

South Sudan: New Pipeline Alternatives
New York Times
David Buom Choat, South Sudan’s acting ambassador to the United Nations, said his country wanted to build pipelines through Kenya, Ethiopia and Djibouti to ship its oil while trying to resolve a dispute with Sudan over fees for using its pipelines…

South Sudan: Students’ Union Receive 30000 SSP From Lakes State Governor
AllAfrica.com
By Misuk Moses Mule, 20 February 2012 Juba — The South Sudanese Students Union in Uganda has expressed gratitude to the Governor of Lakes State, Eng. Chol Tong Mayay over his support for the student activities. The Union Finance Secretary, 

Eight19 lights up South Sudan
Business Weekly
Cambridge CleanTech pioneer, Eight19, has begun deploying its IndiGo pay-as-you-go personal solar electricity system for off-grid communities in the world’s youngest country – South Sudan. Having launched the solar scratch cards in Kenya last September 

Canada deports HIV positive sex offender to South Sudan
DigitalJournal.com
By Arthur Weinreb By Arthur Weinreb. Winnipeg – The former Winnipeg resident, convicted of sex offences for failing to disclose his HIV positive status, has been removed from Canada. Whether his actions were criminal is now before the Supreme Court of 


DigitalJournal.com
Govt grants additional €500k to GOAL for South Sudan relief
Irish Examiner
The Department of Foreign Affairs (DFA) today said it has allocated €500000 to GOAL to help them respond to the urgent needs of tens of thousands of refugees in the Maban region of South Sudan. This funding is in addition to an initial €200000 provided 

Boston.com
By Edith M. Lederer AP / February 20, 2012 UNITED NATIONS—South Sudan’s acting UN ambassador said Monday his country wants to build alternative pipelines through Kenya, Ethiopia and Djibouti to ship oil while trying to resolve a dispute with 

South Sudan probes killing of Kenyan workers in Eastern Equatoria
Sudan Tribune
February 20, 2012 (JUBA) – South Sudan on Monday said it has formed a committee to investigate claims that three Kenyan’s have been killed and three others injured in an attack on Friday 17 February reportedly carried by armed bandits in Eastern 

South Sudan: Worsening food crisis
Eurasia Review
An already dire food situation in South Sudan could deteriorate amid growing economic problems, food shortages and a mass influx of people fleeing Sudan in the next two months, agencies warn. The UN World Food Programme (WFP) and Food and Agricultural 

Lasting peace in South Sudan?
Marshalltown Times Republican (blog)
In a word, that elusive state is what villagers of Old Fangak, South Sudan want. It is easy to understand after living and working among them for nearly nine days. Located in northeast South Sudan, Old Fangak specifically and South Sudan generally have 
South Sudan wants alternative oil pipelines
BusinessWeek
South Sudan’s acting UN ambassador says his country wants to build alternative pipelines through Kenya, Ethiopia and Djibouti to ship the country’s oil while trying to resolve a dispute with neighboring Sudan over fees for using its pipelines.

HIV-positive man convicted of aggravated sex assault deported to South Sudan
CTV.ca
Canada Border Services Agency confirmed that Clato Mabior was sent back to South Sudan on Wednesday. (file image) A Winnipeg immigrant convicted for failing to tell his sex partners he was HIV-positive has been deported. The Canada Border Services


CTV.ca
Steve Young: Ritual involves slicing open boys’ foreheads
Sioux Falls Argus Leader
A woman grinds grain in Panyang, South Sudan. Reporter Steve Young is traveling to South Sudan to report on David Jal’s mission to build schools and hospitals. / Rhonda Morse / Submitted photo Argus Leader reporter Steve Young is traveling in South 
South Sudan triggers domestic outcry in Beijing
Financial Times
By Katrina Manson in Juba Lu Zhifang’s mother was horrified at the prospect of her leaving China for the first time to take up a job in South Sudan, and she tried to stop her getting a passport. So when 29 Chinese workers were kidnapped north of the 

South Sudan: 9000 Kenyans Register in Juba
AllAfrica.com
By Lagu Joseph Jackson, 19 February 2012 Juba — At least about nine thousand Kenyans living in Juba the capital of South Sudan were registered following last month’s order from the Ministry of Interior that all foreigners should register with their 

Disputed Sudan Oil Can Unload After Court Ruling, Trafigura Says
BusinessWeek
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  

Thu Feb 2, 2012 12:23pm EST

* Transit row worsening as countries try to disentangle oil industries

* South Sudan took three-quarters of oil when became independent

* Needs to pay for using pipelines and Port Sudan

JUBA, Feb 2 (Reuters) – President Salva Kiir said on Thursday South Sudan wants to end a row with Sudan over oil transit payments but has rejected a proposal requiring Juba to pay billions of dollars and keep exporting crude through the neighbouring country.

The two neighbours are locked in a worsening row over disentangling their oil industries after the South split from Sudan and became independent in July, following decades of civil war that ended with a peace deal in 2005.

The landlocked new nation took three-quarters of the oil production – the lifeblood of both economies – but needs to pay for using northern pipelines and the Red Sea port of Port Sudan.

Tension rose when Sudan said last month it started seizing southern oil as compensation for what it called unpaid pipeline transit fees. South Sudan responded last week by shutting down its entire output of 350,000 barrels a day.

On Friday, Kiir met Sudanese President Omar Hassan al-Bashir on the sidelines of an African Union (AU) summit to discuss oil but failed to reach a deal.

Kiir said he had rejected at the meeting a draft agreement by the AU because it would have required Juba to keep selling oil from some fields through Sudan’s export facilities.

“It is difficult for me to accept a deal that leaves our people vulnerable, dependent and paying billions they do not owe,” Kiir said, according to the text of his speech published by the government.

NEGOTIATIONS

The agreement would also have required South Sudan to supply 35,000 barrels a day to Sudan’s refineries, he said.

The value of the oil would be deducted from payments of $5.4 billion South Sudan also would have to make under the proposal to help Sudan cope with the loss of southern oil.

Kiir said the agreement had also not covered other conflicts such as marking the joint border and finding a solution for the disputed region of Abyei.

“I want to be clear that the Republic of South Sudan is committed to continue negotiations but we would also be wise to pursue efforts to enhance our economic self-sufficiency, prosperity and national security should we not find common ground with Khartoum for now,” he said.

South Sudan said last month it would build an alternative pipeline to Kenya within eleven months to end dependency on Sudan’s facilities.

But analysts are sceptical the project will take off because it would have to cross rough terrain and may not be viable.

Sudan accused South Sudan on Wednesday of being “hostile” towards Khartoum in the oil talks. (Writing by Ulf Laessing; Editing by Sophie Hares)

http://www.reuters.com/article/2012/02/02/sudan-south-oil-idUSL5E8D26M620120202

South Sudan’s Leader Rejects AU Proposal for Oil Deal With Sudan

By Jared Ferrie – Feb 2, 2012 9:24 AM ET

South Sudanese President Salva Kiir said he rejected an African Union proposal to end an oil dispute with Sudan because it required the south to pay the north billions of dollars and use its pipelines to export crude.

Kiir, who held African Union-mediated talks with Sudanese President Umar al-Bashir on Jan. 27 in the Ethiopian capital, Addis Ababa, said the proposal required South Sudan to ship crude from certain oil fields through Sudan’s pipelines to the Red Sea.

“It is difficult for me to accept a deal that leaves our people vulnerable, dependent and paying billions they do not owe,” Kiir told reporters today in Juba, the capital. “This is an attempt to ensure that we do not build our own pipelines.”

South Sudan took control of about three-quarters of Sudan’s output of 490,000 barrels of oil a day when it gained independence in July. The crude is pumped mainly by China National Petroleum Corp. (CNPZ), Malaysia’s Petroliam Nasional Bhd. and India’s ONGC Videsh Ltd.

South Sudan completed a shutdown of oil production on Jan. 26 after accusing government in Khartoum of diverting oil to its refinery, forcing companies to load crude onto ships it controlled, and blockading other shipments. Sudan said it confiscated oil to cover unpaid bills.

South Sudan signed a memorandum of understanding with Kenya on Jan. 24 to build a pipeline to the Kenyan port of Lamu.

To contact the reporter on this story: Jared Ferrie in Juba, South Sudan atjferrie1@bloomberg.net

http://www.bloomberg.com/news/2012-02-02/south-sudan-s-leader-rejects-au-proposal-for-oil-deal-with-sudan.html

South Sudanese refugees must leave Israel
Jewish Telegraphic Agency
JERUSALEM (JTA) — South Sudan nationals living in Israel will have two months to return to their home country or face deportation, Israel’s Interior Ministry said. Since South Sudan became an independent nation in July, refugees from the area no 

Ethnic Militarization: The Privatization of War in South Sudan
New Sudan Vision
Although what constitutes a war is still quite controversial—not as defined by its magnitude, but as typified or gauged by the number of casualties—widespread tribal conflicts, such as those for whichSouth Sudan is now infamously known for, can, 

Help Arrives For The Survivors Of Violence In South Sudan
YouTube
A spate of violence in South Sudan’s Jonglei State has driven thousands of people from their homes and into the bush, where they survived on what they could find. WFP has reachd 80000 people in the region with emergency food rations and is working with 

South Sudan’s Leader Rejects AU Proposal for Oil Deal With Sudan
Bloomberg
South Sudanese President Salva Kiir said he rejected an African Union proposal to end an oil dispute with Sudan because it required the south to pay the north billions of dollars and use its pipelines to export crude.


South Sudan
 wants more talks to end oil transit row

Reuters
Transit row worsening as countries try to disentangle oil industries * South Sudan took three-quarters of oil when became independent * Needs to pay for using pipelines and Port Sudan JUBA, Feb 2 (Reuters) – President Salva Kiir said on Thursday South 

UN official Valerie Amos warns of looming crisis in South Sudan
Los Angeles Times
REPORTING FROM JUBA, SOUTH SUDAN — The world’s newest nation, South Sudan, faces a devastating humanitarian crisis that could grow worse as people flee a border conflict with Sudan, the United Nations’ emergency relief coordinator warned Thursday.

JobsVehicle Fleet Manager – South Sudan (fixed term, 5-6 months)
Reuters AlertNet
Since starting in 1998, MAG’s programme in South Sudan has grown rapidly into one of our largest programmes globally. MAG South Sudan is undertaking a wide range of mine action initiatives and currently has humanitarian mine action projects operating 

COLUMN: Sudan and Congo savaged as world shrugs
Delmarva Now
Policymakers pin their hopes on the separation of South Sudan from the main part of the country in 2011 and recent elections in Congo as signs of progress. But this is pure hopefulness, not policy. The two Sudans are in active dispute over several 
China to ask South Sudan for help on kidnapped workers: report
Reuters
BEIJING (Reuters) – China will press South Sudan for help in securing the release of 29 Chinese workers held captive for five days and may appeal to the African Union and other parties to mediate in negotiations, state media reported on Thursday.

South Sudanese distressed by looming deportations
Jerusalem Post
By BEN HARTMAN 02/02/2012 05:18 By Ben Hartman Members of the South Sudanesecommunity in Israel on Wednesday expressed anger and confusion at the government decision announced a day earlier, which will require the entire community to leave Israel by 

South Sudan army deserter arrested in Rumbek on charge of killing businessman
Sudan Tribune
February 1, 2012 (BOR) – Authorities in Lakes State have captured a South Sudanese army deserter suspected of killing a Ugandan businessman in the state’s capital, Rumbek, on Wednesday. The soldier, Pabek Mackuac, was a member of division five in the 

Energy PS Patrick Nyoike. Last Tuesday,  Kenya signed the oil pipeline and fibre optic deal allowing South Sudan build and own a pipeline through the Kenyan territory.  FILE

Energy PS Patrick Nyoike. Last Tuesday, Kenya signed the oil pipeline and fibre optic deal allowing South Sudan build and own a pipeline through the Kenyan territory. FILE 

By ZEDDY SAMBUPosted  Monday, January 30  2012 at  21:04

Kenya and South Sudan will form a joint commission to streamline plans for the construction of an oil pipeline between Juba and the port city of Lamu.

South Sudan intends to construct a pipeline through Kenya to export its crude oil while the government would build a refinery in Isiolo to process the crude for local use and export to countries like Ethiopia.

“We do not have the money to build the pipeline. South Sudan has said it will build it but it will be jointly managed by the two countries,” said Energy PS Patrick Nyoike.

The PS said a similar arrangement would be adopted for the planned refinery, possibly on a 50:50 basis.

Last Tuesday, Kenya signed the oil pipeline and fibre optic deal allowing South Sudan build and own a pipeline through the Kenyan territory.

“We will form a joint venture on the twin projects . We have a counterproposal from Toyota Tsusho Corporation to build several multi products to Lamu and Nakuru,” he said.
Another line is planned to deliver products to the border town of Moyale to be tapped by Ethiopia. A pipeline would also be built to connect to the oil fields in Hoima in northern Uganda.

Mr Nyoike said it was possible to complete the project in a year given that the 2,000-kilometre line from South Sudan oil fields to Port Sudan was laid in 18 months.

The refinery, pipeline and fibre optic cable are part of the Sh16 trillion Lamu Port and Southern Sudan-Ethiopia Transport Corridor project.

The project includes resort cities along the corridor and airports linked via a modern railway line.

The pipeline offers South Sudan an alternative route to transport oil, which accounts for 98 per cent of its revenues while opening up northern Kenya for development.

Toyota Tsusho Corporation is planning to build a 1,400-kilometre oil pipeline under Build Operate and Transfer before handing over control of the facility to the two governments after 20 years.

The pipeline would carry a projected 450,000 barrels of oil a day from Juba in southern Sudan to Lamu on the Indian Ocean.

The estimated cost of the pipeline is $1.5 billion dollars (Sh135 billion).

“The pipeline is a gateway to move Sudanese oil to the market including Kenya. Both the crude oil line and the refinery are urgent. Our plan is to deliver both at the same time,” said Mr Sylvester Kasuku, Infrastructure specialist at Kenya’s Office of the Prime Minister.

He said Kenya would earn transit fees in line with international best practice adding that preliminary works on other aspects of Lappset such as roads and port building have started.

Landlocked South Sudan exports roughly 350,000 barrels per day but has started shutting down production after talks collapsed with Sudan over transit fees and revenue sharing.

Sudan says South Sudan has not paid for use of northern export facilities since its independence and is demanding $1 billion in fees and $36 per barrel for the crude to be exported through Port Sudan.

In the event of exports through Port Sudan being blocked, South Sudan has said the country can survive on borrowing (using its crude as collateral) until a new export avenue is created.

http://www.businessdailyafrica.com/Kenya+South+Sudan+to+form+team+for+oil+pipeline+project++/-/539546/1317026/-/item/1/-/us053d/-/index.html


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.

http://www.chinadaily.com.cn/usa/world/2012-01/30/content_14507285.htm


JUBA/DUBAI | Mon Jan 30, 2012 4:52am EST

(Reuters) – Sudan released tankers loaded with South Sudanese oil that had been held at Port Sudan in a row over export transit fees, days after Khartoum seized crude from its new neighbor and offered it at a steeply discounted price.

Sudan’s Oil Minister Awad al-Jaz said the release came as part of efforts to reach an agreement with South Sudan on the transit fees, but so far “we don’t have any positive response from the other side.”

South Sudan has shut down oil output in protest at the seizing of the cargoes, and talks between the two to reach a settlement broke down over the weekend.

The former civil war foes have failed to agree the value of the fee landlocked South Sudan should pay to pump oil north by pipeline for export from Port Sudan.

“The four ships that were being detained were released yesterday at 5:00 p.m.,” South Sudan’s Minister of Petroleum and Mining Stephen Dhieu Dau said by telephone.

“They were carrying oil for Vitol and Sinopec.”

He added that 3.5 million barrels have been released but Sudan should now allow 5.4 million barrels to be lifted, indicating that the dispute was far from resolved.

“The ships are waiting,” said Dae. “If they want to negotiate in good faith with us they should allow us to come and lift it.”

The ships that have been released were already loaded and Sudan had held them from sailing. Separately, Sudan has sold off at least one tanker of crude seized from the South and has offered two other cargoes.

In addition to the three, at least seven tankers are still waiting at the port to lift December and January cargoes, raking up demurrage costs of $20,000-$22,000 per day, traders and shipbrokers said.

Two of the tankers that were freed were chartered by oil trading giant Vitol, an industry source told Reuters.

“The two tankers were freed on Sunday and they are carrying a total of 1.6 million barrels,” said the industry source, declining to be identified because he is not authorized to talk to the media.

Oil is the lifeline of both countries’ economies. The South controlled about 350,000 bpd of oil output when it became independent in July under a 2005 peace agreement that ended decades of civil war.

Oil provides about 98 percent of South Sudan’s income and is vital for developing an already poor country devastated by years of civil war.

China is the biggest buyer of oil from the two countries and the biggest investor in South Sudan’s oilfields.

(Reporting by Amena Bakr in DUBAI and Hereward Holland in JUBA; Editing by Manash Goswami)

http://www.reuters.com/article/2012/01/30/us-sudan-oil-idUSTRE80T0AQ20120130


South Sudan oil row: Sudan to release oil shipments and sign a deal with South Sudan

A map showing South Sudan and Sudan's oil fields

Sudan says it will release detained crude oil shipments belonging to South Sudan to help end a bitter dispute.

Sudan says it will release detained crude oil shipments belonging to South Sudan to help end a bitter dispute.

The laden vessels would be allowed to leave Port Sudan as soon as possibile, a Khartoum negotiator said.

The move followed South Sudan’s threat to halt production, as talks on the row over oil transit fees broke down.

The newly independent state currently has to use Sudan’s infrastructure to export its oil, but halting production would hurt the economies of both.

South Sudan seceded in July 2011, taking with it the lion’s share of Sudan’s oil – but without agreement on oil transit fees.

The BBC’s James Copnall in Khartoum says Sudan needs these oil transit fees to cover the gap in its budget caused by South Sudan’s secession.

It has started seizing oil in lieu of the fees.

Three ships carrying 2.2 million barrels of oil have been detained, AFP news agency says.

South Sudan has accused Khartoum of taking oil worth $815m (£518m) in total.

‘Stealing'”President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed el Khatib told a news conference in the Ethiopian capital, where talks have been taking place.

Mr Khatib said releasing the ships should open the way for what he called a “cover agreement” between the two countries to be signed – and that Khartoum was ready to do this by the end of Saturday.

There was no immediate reaction from South Sudan.

Late on Friday, South Sudan’s lead negotiator, Pagan Amum, said a deal had fallen through because Sudan was “stealing” his country’s oil.

He also said the shutdown of South Sudan’s oil production would be complete by the end of Saturday.

Oil accounts for an estimated 98% of landlocked South Sudan’s budget – but it currently has to use Sudan’s pipelines and export terminal to export the oil.

Reuters news agency cited industry sources as saying Sudan had already sold at least one cargo of crude oil seized from South Sudan at a discount of millions of dollars, and was offering more.

Sudan’s President Omar al-Bashir and his South Sudanese counterpart, Salva Kiir, have been holding talks in Addis Ababa, brokered by the leaders of Djibouti, Ethiopia, Kenya and Somalia.

Observers say the oil row has created the greatest crisis between the two states since South Sudan became independent, and has stoked fears of a return to war.

A map showing South Sudan and Sudan's oil fields

The laden vessels would be allowed to leave Port Sudan as soon as possibile, a Khartoum negotiator said.

The move followed South Sudan’s threat to halt production, as talks on the row over oil transit fees broke down.

The newly independent state currently has to use Sudan’s infrastructure to export its oil, but halting production would hurt the economies of both.

South Sudan seceded in July 2011, taking with it the lion’s share of Sudan’s oil – but without agreement on oil transit fees.

The BBC’s James Copnall in Khartoum says Sudan needs these oil transit fees to cover the gap in its budget caused by South Sudan’s secession.

It has started seizing oil in lieu of the fees.

Three ships carrying 2.2 million barrels of oil have been detained, AFP news agency says.

South Sudan has accused Khartoum of taking oil worth $815m (£518m) in total.

‘Stealing'”President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed el Khatib told a news conference in the Ethiopian capital, where talks have been taking place.

Mr Khatib said releasing the ships should open the way for what he called a “cover agreement” between the two countries to be signed – and that Khartoum was ready to do this by the end of Saturday.

There was no immediate reaction from South Sudan.

Late on Friday, South Sudan’s lead negotiator, Pagan Amum, said a deal had fallen through because Sudan was “stealing” his country’s oil.

He also said the shutdown of South Sudan’s oil production would be complete by the end of Saturday.

Oil accounts for an estimated 98% of landlocked South Sudan’s budget – but it currently has to use Sudan’s pipelines and export terminal to export the oil.

Reuters news agency cited industry sources as saying Sudan had already sold at least one cargo of crude oil seized from South Sudan at a discount of millions of dollars, and was offering more.

Sudan’s President Omar al-Bashir and his South Sudanese counterpart, Salva Kiir, have been holding talks in Addis Ababa, brokered by the leaders of Djibouti, Ethiopia, Kenya and Somalia.

Observers say the oil row has created the greatest crisis between the two states since South Sudan became independent, and has stoked fears of a return to war.

Sudan to release South Sudan oil shipments in portBy Otto Bakano (AFP) –ADDIS ABABA — Sudan agreed Saturday to free ships with South Sudanese oil as a goodwill gesture to ease negotiations aimed at resolving a furious row over pipeline transit fees with its southern neighbour.The two former civil war foes have held lengthy negotiations, but have been unable to reach agreement over the dispute which has seen Khartoum seize oil and South Sudan take the drastic step of shutting oil production.”We are ready to continue these talks and to prove it, we are… releasing vessels in Port Sudan to allay fears,” senior Khartoum official Sayed al-Khatib told reporters in Addis Ababa, where the talks are being held.”The vessels will be free to leave immediately,” al-Khatib added. “We expect the (South Sudan oil) shutdown to be halted and reversed.”Sudan has been detaining three ships carrying 2.2 million barrels of oil.In addition, Khartoum admits to have confiscated 1.7 million barrels of South Sudan crude, a measure it said was to compensate for Juba’s use of its pipeline and refinery.On Friday, South Sudan President Salva Kiir, who met with Sudanese President Omar al-Bashir in the Ethiopian capital for the oil talks, failed to sign an agreement due to Juba’s concerns over the detained ships, al-Khatib explained.

Landlocked South Sudan split from Sudan in July, taking with it three quarters of the country’s oil, but all pipeline and export facilities are controlled by Sudan.

“This oil was indeed developed when Sudan was one country and therefore all of the Sudanese people need to reap the benefit of it,” al-Khatib said.

South Sudan accuses Khartoum of stealing $815 million worth of oil. Al-Khatib said that Juba had not paid it for using the refinery since South Sudan seceded.

“We started taking the equivalent in kind of what we had been invoicing South Sudan, not a cent more,” he said.

African Union mediators have proposed an initial deal calling on the two countries to reverse their unilateral decisions before inking a comprehensive agreement later.

The oil talks come ahead of an AU summit starting Sunday. Al-Khatib said he hoped they could sign the initial agreement soon.

South Sudan’s chief negotiator Pagan Amum on Friday said the negotiations had reached an “impasse because of the intransigence of the government of Sudan.”

“The mood of course was not good because you can imagine sitting with somebody who is stealing your property,” he said of Kiir’s and al-Bashir’s meeting.

Juba this week began to halt oil production after it ordered a complete shutdown over the dispute with Khartoum, with over half the wells now shut, the South says.

China, which relies on South Sudan for nearly five percent of its oil and is also a key ally of the Khartoum government, has been supporting negotiations between the two sides.

This week South Sudan signed an agreement with Kenya to build an oil pipeline to a Kenyan port, potentially freeing it from its dependence on exporting oil through Sudan.

However, industry experts have said that building a pipeline could take more than three years and cost as much as $4 billion — a staggering cost for the South, where oil production is already close to peaking.

South Sudan has also approached Ethiopia to build a pipeline connecting to the Red Sea state of Djibouti.

Earlier this month, South Sudan signed its first oil deals with foreign nations since its independence, inking agreements with Chinese, Indian and Malaysian firms.

The deals, which replace deals signed with Khartoum under a unified Sudan, cover oil production in the two key petroleum states of Unity and Upper Nile.

Khartoum also opened bids to international companies days after the South penned its deals.

After South Sudan gained its independence, Sudan, which also relies on oil, was scrambling for ways to bolster its finances.

http://www.google.com/hostednews/afp/article/ALeqM5iOGJrxGo0w09YrYg3hV-ptz5Xx7g?docId=CNG.3130692da5b8a605890904cff0c6413b.d01

Sudan says to release ships seized from S.Sudan

Sat Jan 28, 2012 3:41pm GMT

* S.Sudan shutting down oil output in retaliation

* Sudan now says to free ships, ready to sign oil deal

* China biggest importer of Sudanese oil (Adds Sudan denies looting oil revenue, S.Sudan reaction)

By Aaron Maasho

ADDIS ABABA, Jan 28 (Reuters) – Sudan said on Saturday it would free tankers carrying cargoes of South Sudanese crude it had seized earlier this month, in a push to defuse a row over transit fees between former civil war foes that both depend on oil for almost all their income.

Landlocked South Sudan, which became independent in July after seceding from Sudan, has to use a northern pipeline and the port of Port Sudan to export its crude, and the two countries are in dispute over the transit fees it should pay.

The row heated up this month when Sudan said it was confiscating some of South Sudan’s oil exports to make up for what it called unpaid fees. South Sudan retaliated by saying it would shut down its crude output by Saturday.

Oil is the lifeline of both countries’ economies, and the south’s secession left Khartoum with output of about 125,000 barrels per day and South Sudan with production that has fallen slightly to 350,000 bpd from 375,000 bpd in June.

Oil revenue is about 98 percent of South Sudan’s income, and is vital if the government is to develop a country devastated by years of civil war and one of the world’s poorest nations.

China is the biggest buyer of oil from the two countries, taking some 12.99 million barrels last year – five percent of overall 2011 crude imports by China, which is also the biggest investor in South Sudan’s oilfields.

“President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed El-Khatib, deputy head of Sudan’s negotiating team, told a media conference in the Ethiopian capital on Saturday.

“By taking this step, we expect the cover agreement to be signed, the shutdown to be halted, and the terms of the cover agreement to be respected,” said El-Khatib. “Before the end of today, we could be able to sign the cover agreement. We, at least, are ready to sign.”

A South Sudanese official, asked to comment, told Reuters: “We are studying the claim. We are waiting for confirmation from the shipping companies.” He did not want to be named.

LEADERS FOUND NO ANSWER

Sudanese President Omar al-Bashir and South Sudan’s President Salva Kiir met on the sidelines of a meeting of East African officials in Ethiopia on Friday, but failed to resolve their differences over the oil transit tariff.

Ethiopian Prime Minister Meles Zenawi, a broker between the two sides, met Bashir again on Saturday.

The row with Sudan has angered many in South Sudan, where independence, the result of a referendum following a 2005 peace accord, is often framed as the climax of a long struggle against political and economic marginalisation by the north.

South Sudan’s Kiir accused Khartoum of “looting” oil worth roughly $815 million and of building a tie-in pipeline to divert 120,000 barrels per day of southern oil flowing through the north.

Industry sources have said Sudan has sold at least one cargo of crude seized from South Sudan at a discount of millions of dollars to the official price charged by the South, and is offering more.

Awad Abdelfatah, undersecretary of Sudan’s petroleum ministry, denied South Sudan’s accusations of oil “theft”.

“Since the 9th of July (South Sudan’s independence day), we have opened our export line for them (South Sudan) without any hindrance,” Abdelfatah told Reuters.

“We have been sending them invoices since that time and have been patient until the 1st of December. We decided then to take our dues. We didn’t take anything more than what our invoice shows,” Abdelfatah said.

Sudan’s civil war, fought over issues of ethnicity, religion, ideology and oil, ebbed and flowed from 1955 to 2005 and caused the deaths of an estimated 2 million people. Southerners voted overwhelmingly for secession in a referendum in January 2011.

(Writing by James Macharia; Editing by Tim Pearce)

http://af.reuters.com/article/commoditiesNews/idAFL5E8CS04920120128?sp=true

Sudan To Free Seized South Sudan Oil Ships

1/28/2012 10:33 AM ET
(RTTNews) – Sudan will release ships carrying South Sudan’s oil cargos to end a dispute over transit fees, reports said Saturday citing an official involved in negotiations.

An official in the negotiating team, Sayed El-Khatib reportedly said Sudan is willing to sign an agreement. He expects a deal to be signed by both countries by the end of the day.

Earlier in the day, South Sudan said it will complete the shutdown of its oil production on Saturday, following a dispute with the neighboring Sudan.

The country decided to go ahead with the shutdown after talks between President Salva Kiir and his Sudanese counterpart Omar al-Bashir on Friday failed to produce a deal to end the dispute over transit fees for oil. The leaders met in the Ethiopian capital of Addis Ababa on the sidelines of the 18th African Union Summit.

South Sudan alleges that Sudan is seizing its oil, meant for export, during transit through its territory to a northern port. Sudan proposed a transit fee of $36 barrel, while South Sudan is offering about $1 a barrel. The country has reportedly accused Sudan of stealing $815 million of its oil.

At the time of declaring independence in July 2011, South Sudan gained control of nearly 75 percent of Sudan’s oil production totaling around 500,000 barrels a day. China is the leading destination for Sudanese oil exports. Both South Sudan and Sudan are heavily dependent on oil revenues.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

http://www.rttnews.com/1807240/sudan-to-free-seized-south-sudan-oil-ships.aspx?type=gn&utm_source=google&utm_campaign=sitemap

Sudan says to release ships seized from South Sudan

By Aaron Maasho

ADDIS ABABA | Sat Jan 28, 2012 10:46am EST

(Reuters) – Sudan said on Saturday it would free tankers carrying cargoes of South Sudanese crude it had seized earlier this month, in a push to defuse a row over transit fees between former civil war foes that both depend on oil for almost all their income.

Landlocked South Sudan, which became independent in July after seceding from Sudan, has to use a northern pipeline and the port of Port Sudan to export its crude, and the two countries are in dispute over the transit fees it should pay.

The row heated up this month when Sudan said it was confiscating some of South Sudan’s oil exports to make up for what it called unpaid fees. South Sudan retaliated by saying it would shut down its crude output by Saturday.

Oil is the lifeline of both countries’ economies, and the south’s secession left Khartoum with output of about 125,000 barrels per day and South Sudan with production that has fallen slightly to 350,000 bpd from 375,000 bpd in June.

Oil revenue is about 98 percent of South Sudan’s income, and is vital if the government is to develop a country devastated by years of civil war and one of the world’s poorest nations.

China is the biggest buyer of oil from the two countries, taking some 12.99 million barrels last year – five percent of overall 2011 crude imports by China, which is also the biggest investor in South Sudan’s oilfields.

“President Bashir is ready to make this gesture. Sudan is going to release the vessels detained in Port Sudan,” Sayed El-Khatib, deputy head of Sudan’s negotiating team, told a media conference in the Ethiopian capital on Saturday.

“By taking this step, we expect the cover agreement to be signed, the shutdown to be halted, and the terms of the cover agreement to be respected,” said El-Khatib. “Before the end of today, we could be able to sign the cover agreement. We, at least, are ready to sign.”

A South Sudanese official, asked to comment, told Reuters: “We are studying the claim. We are waiting for confirmation from the shipping companies.” He did not want to be named.

LEADERS FOUND NO ANSWER

Sudanese President Omar al-Bashir and South Sudan’s President Salva Kiir met on the sidelines of a meeting of East African officials in Ethiopia on Friday, but failed to resolve their differences over the oil transit tariff.

Ethiopian Prime Minister Meles Zenawi, a broker between the two sides, met Bashir again on Saturday.

The row with Sudan has angered many in South Sudan, where independence, the result of a referendum following a 2005 peace accord, is often framed as the climax of a long struggle against political and economic marginalization by the north.

South Sudan’s Kiir accused Khartoum of “looting” oil worth roughly $815 million and of building a tie-in pipeline to divert 120,000 barrels per day of southern oil flowing through the north.

Industry sources have said Sudan has sold at least one cargo of crude seized from South Sudan at a discount of millions of dollars to the official price charged by the South, and is offering more.

Awad Abdelfatah, undersecretary of Sudan’s petroleum ministry, denied South Sudan’s accusations of oil “theft.”

“Since the 9th of July (South Sudan’s independence day), we have opened our export line for them (South Sudan) without any hindrance,” Abdelfatah told Reuters.

“We have been sending them invoices since that time and have been patient until the 1st of December. We decided then to take our dues. We didn’t take anything more than what our invoice shows,” Abdelfatah said.

Sudan’s civil war, fought over issues of ethnicity, religion, ideology and oil, ebbed and flowed from 1955 to 2005 and caused the deaths of an estimated 2 million people. Southerners voted overwhelmingly for secession in a referendum in January 2011.

(Writing by James Macharia; Editing by Tim Pearce)

http://www.reuters.com/article/2012/01/28/us-sudan-oil-idUSTRE80R0B820120128

South Sudan: Aid Reaching Those in Need
Reuters AlertNet
By Melany Markham, Communications Officer, LWF South Sudan JUBA, South Sudan/GENEVA, 25 January 2012 (LWI) – Humanitarian organizations, including The Lutheran World Federation (LWF), have added emergency aid programs to their ongoing work in South 

South Sudan and Kenya sign oil pipeline deal
SteelGuru
AFP reported that South Sudan signed an agreement with Kenya to build an oil pipeline to a Kenyan port, potentially freeing it from reliance on its northern neighbor Sudan. Mr Elizabeth James Bol South Sudan’s deputy minister of petroleum and mining 

UN urges support for refugees at Davos summit
Aljazeera.com
Guterres, who is at the Davos summit to ask for further financial aid for the UN’s aid effort, has asked for “massive support” from the international community to assist hundreds of thousands of refugees, particularly in Sudan and South Sudan

Sudan Facilitates Humanitarian Aid in South Kordofan and Blue Nile
PR Newswire (press release)
27, 2012 /PRNewswire-USNewswire/ — The humanitarian crisis in South Kordofan and Blue Nile is an expected, logical and inevitable consequence of the war waged by the rebels of the South SudanPeople’s Liberation Movement-North (SPLM-N) and the 

Sudan’s VP threatens army strike on Juba
Sudan Tribune
January 27, 2012 (KHARTOUM) – The second Vice-President of Sudan, Al-Haj Adam Youssef, has warned that his country’s army could strike as far as South Sudan’s capital Juba in pursuit of hunting rebels operating in South Kordofan and Blue Nile…

IOM begins airlift to take South Sudan’s citizens home
Sudan Tribune
January 27, 2012 (KHARTOUM) – An airlift of 12 flights aimed at carrying nearly 400 people stranded in Sudan’s capital Khartoum to their homeland in South Sudan began on Friday, the International Organization for Migration (IOM), has announced…

Sudan says to release ships seized from South Sudan
Reuters
ADDIS ABABA (Reuters) – Sudan will free ships carrying cargos of crude it seized from South Sudan to ease tensions between the two countries, Sayed El-Khatib, deputy head of negotiating team said on Saturday. “President Bashir is ready to make this 

Sudan to release detained oil tankers, sign deal to end dispute over oil with 
KSPR
By AP ADDIS ABABA, Ethiopia (AP) — A Sudanese official says Sudan will immediately release loaded oil tankers it has detained in its port and wants to end a dispute over payments for oil with its neighbor South Sudan. Landlocked South Sudan began 

RT News line, January 28
RT
Oil transit fees have become a major dispute between South Sudan and its northern neighbor, the Republic of Sudan, after the former seceded from Sudan in July. South Sudan has no other choice but to use its neighbor’s infrastructure to export oil, 

South Sudan shuts down more wells as crisis deal flops
Africa Review
By MACHEL AMOS in PalaugPosted Saturday, January 28 2012 at 14:29 South Sudan oil operators closed more 242 oil wells Friday as the government announced it has unearthed further oil theft of more than 40000 barrels per day. This came as President Salva 

Sudan To Free Seized South Sudan Oil Ships
RTT News
(RTTNews) – Sudan will release ships carrying South Sudan’s oil cargos to end a dispute over transit fees, reports said Saturday citing an official involved in negotiations. An official in the negotiating team, Sayed El-Khatib reportedly said Sudan is 

South Sudan oil row: Sudan to release shipments
BBC News
Sudan says it will release detained crude oil shipments belonging to South Sudan to help end a bitter dispute. The laden vessels would be allowed to leave Port Sudan as soon as possibile, a Khartoum negotiator said. The move followed South Sudan’s 
South Sudan ‘to complete shutdown’ of oil production
BBC News
South Sudan says it will complete the shutdown of its oil production on Saturday, after attempts to resolve a dispute with Sudan failed. The presidents of both countries held talks in the Ethiopian capital, Addis Ababa, but were not able to sign a deal 

Published: Jan. 26, 2012 

JUBA, South Sudan, Jan. 26 (UPI) — South Sudan, born six months ago, says it’s shutting down more than 900 oil wells after accusing its former masters in Khartoum of stealing its oil piped north for export.

The shutdown is a bold, some might say almost suicidal, move by the world’s newest state, which depends on oil for 98 percent of state revenue.

But it reflects the frustration and anger in the south at what is widely seen as the Machiavellian machinations of Khartoum to sabotage the breakaway state that sits on 75 percent of Sudan’s oil.

The dispute could trigger new violence. The Financial Times said “the reduction in supply may prompt a rise in global prices” amid Iranian threats to close the export outlet from the Persian Gulf.

The shutdown ordered Monday by South Sudanese President Salva Kiir sharply heightened the tension with north Sudan after acrimonious talks on how to divide oil revenue, vital to both states, collapsed.

Sudan has reserves of 6.6 billion barrels and is rated the third largest producer in sub-Saharan Africa after Angola and Nigeria. The two Sudans produce 460,000 barrels per day, with the greater part by the south.

But landlocked South Sudan can only export via pipelines running through the north to Sudan’s only terminal at Port Sudan on the Red Sea.

Oil is the core of the dispute that threatens the existence of the infant state, which was established July 9, 2011, after a landslide vote for secession in a referendum.

The poll was conducted under a 2005 peace treaty that ended a civil war that began in 1955 and took the lives of more than 2 million people.

Khartoum has demanded fees of $32 per barrel for use of the pipelines and the terminal. South Sudan says that’s extortionate and has offered $1 a barrel as part of a multimillion-dollar compensation package for seceding.

The south says it was left with no option but to shut down oilfields after Khartoum unilaterally sold southern oil worth $815 million.

The north said it seized the oil in lieu of transit fees it said the southern government hasn’t paid since secession.

The halt in production leaves both north and south in a precarious economic situation.

The south has no other resources it can fall back on and needs oil revenue to pay for its drive to build an economic and social infrastructure in the impoverished region, where there are only about 50 miles of paved road and few schools.

The north is also under growing economic pressure. In the final decade before separation, “oil production fed a boom in consumer spending and services concentrated around Khartoum,” the Financial Times reported.

“But the government was ill-prepared for the 75 percent drop in revenues from oil when the south voted for independence and took most of the country’s reserves with it in July.”

Since then, the north’s currency has nosedived 60 percent on the black market, alongside a decline in foreign currency inflows.

“Annual inflation reached 21 percent in September 2011 but the price of some basic foodstuffs such as sorghum, a staple food, have more than doubled, ramping up social tension,” the Financial Times observed.

“The government is definitely worried,” said Ibrahim Ghandour, political secretary of the north’s ruling National Congress Party.

“They’ve been quelling protests with violence, like before, and with large numbers of arrests.”

Khartoum argues that by 2015 it will have lost $15 billion with the secession of the south. The International Monetary Fund puts the figure at $5 billion.

The south’s lead negotiator, Pagan Allum, told the Financial Times the Muslim Arab regime in Khartoum had plundered the Christian and animist south for centuries.

He said Kiir’s Sudan People’s Liberation Movement government in the southern capital of Juba may demand Khartoum pay for oil revenue over which it claims the north has “cheated the south” since the 2005 peace pact.

The oil shutdown came a day after South Sudan and neighboring Kenya signed a memorandum of understanding to build a new pipeline to Lamu on the Indian Ocean.

Allum said another possibility is running a pipeline through Ethiopia to Djibouti in the Horn of Africa.

But both projects, if they take off, will take years to reach fruition.

Read more: http://www.upi.com/Business_News/Energy-Resources/2012/01/26/Angry-South-Sudan-shuts-down-900-oil-wells/UPI-60331327611953/#ixzz1khdZtLjt

South Sudan To Continue Oil Shutdown; Talks End Without Agreement
Wall Street Journal
LONDON (Dow Jones)–South Sudan will press ahead with its shutdown of oil production after negotiations with Sudan ended without agreement, David Kong, deputy of mission at South Sudan’sembassy in Ethiopia, told Dow Jones Newswires on Friday.
SD’s Generosity Helps South Sudan
KELOLAND TV
He’s bringing the generosity of South Dakota into South Sudan. Whenever pilot Moses Joknhial II flies himself into South Sudan, the people in his hometown have the mistaken impression that he’s a jet-setting millionaire. “They think that I’m the hero, 

KELOLAND TV
Sudan Facilitates Humanitarian Aid in South Kordofan and Blue Nile
Sacramento Bee
By Embassy of the Republic of the Sudan WASHINGTON, Jan. 27, 2012 — /PRNewswire-USNewswire/ — The humanitarian crisis in South Kordofan and Blue Nile is an expected, logical and inevitable consequence of the war waged by the rebels of the South Sudan 
S. Sudan oil shutdown continues after talks fail
Reuters
By Yara Bayoumy and Aaron Maasho | ADDIS ABABA (Reuters) – The presidents of Sudan andSouth Sudan failed Friday to resolve an oil dispute that has led to the shutdown of the South’s crude output and threatened both countries’ economies.
Kenya, South Sudan ink oil pipeline agreement
Coastweek
NAIROBI, (Xinhua) — Kenya and South Sudan governments have signed an agreement that will allow for the construction of an oil pipeline connecting the two countries. A statement from Kenya ‘s Prime Minister’s office issued here on Wednesday said the 
Angry South Sudan shuts down 900 oil wells
Outcome Magazine
JUBA, South Sudan, Jan. 26 (UPI) — South Sudan, born six months ago, says it’s shutting down more than 900 oil wells after accusing its former masters in Khartoum of stealing its oil piped north for export. The shutdown is a bold, some might say 

South Sudan's President Salva Kiir arrives at the the 20th Extraordinary Summit of IGAD Heads of state meeting in Addis AbabaSouth Sudan’s President Salva Kiir arrives at the the 20th Extraordinary Summit of IGAD Heads of state meeting in Addis Ababa (NOOR KHAMIS, REUTERS / January 27, 2012)
Aaron Maasho and Hereward HollandReuters1:12 p.m. CST, January 27, 2012
NAIROBI/PALOUGE, South Sudan (Reuters) – South Sudan’s top negotiator said his country would complete an oil production shutdown by Saturday, after Sudan and South Sudan failed to agree on a deal to end an oil crisis.Sudanese President Omar al-Bashir and South Sudan’s President Salva Kiir met on the sidelines of a meeting of East African officials in Ethiopia.The two discussed a deal that “would have frozen the situation and reverses the unilateral actions that had been taken by both,” a source close to the talks told Reuters.But Pagan Amum told reporters in Addis Ababa: “Tomorrow the shutdown will be complete and what will be remaining to be done the day after is finishing the cleaning and flushing of facilities.”South Sudan is shutting down its oil production, last put by officials at 350,000 bpd in November, to protest against Sudan seizing some southern shipments at the northern port of Port Sudan in a dispute over pipeline fees.Both countries depend heavily on oil and have put forward widely differing figures for a possible transit fee. Sudan has publicly proposed $36 per barrel, while South Sudan has listed figures under $1 per barrel.The main operator Petrodar expects to close the key blocks 3 and 7, officials said on Friday. Petrodar is a consortium comprising mainly Chinese firms China National Petroleum Co (CNPC), Sinopec and Malaysian firm Petronas. Analysts estimate its total oil output from South Sudan at 250,000 bpd.

“We have shut down almost around 250 (wells). Remaining are 390 oil wells. The program is expected to finish in three more days. Maybe on 30 or 31 of this month all oil wells in Ada, Gumri, Moleta and Palouge will be shut down,” Hago Bakheed Mahmoud, field operation manager for Petrodar, told reporters at the Palouge oil fields.

He said current output was still between 145,000 and 150,000 barrels a day, adding that the company could resume production within three to four days. Blocks 3 and 7 provide much of South Sudan’s output.

Oil Minister Stephen Dhieu Dau said the shutdown was going to plan.

“The shutdown is going well,” Dhieu Dau told reporters during a visit to the Palouge oil field in Upper Nile state. “Now 50 percent of the wells are off,” he said, without saying whether this was referring to only Upper Nile fields or the whole country.

He spoke after the presidents of Sudan and South Sudan had met at the African Union in Addis Ababa.

He said Khartoum may have diverted some oil from the fields which lay on the southern side of the joint border to feed its refinery in Khartoum.

There was no immediate comment from Sudan which has said it was seizing an unspecified amount of southern oil to use for its refineries in a dispute over pipeline transit fees.

Sudan has also sold at least one cargo of crude seized from South Sudan at millions of dollars discount to the official price charged by the South and is offering more, industry sources have said.

(Reporting by Hereward Holland; writing by Ulf Laessing editing by Keiron Henderson)

Petrodar sees its S.Sudan oil shutdown complete soon
Fri Jan 27, 2012 5:49pm GMT

PALOUGE, South Sudan, Jan 27 (Reuters) – Chinese-Malaysian oil consortium Petrodar plans to shut down South Sudan’s oil blocks 3 and 7, completing the shut down of its own oil output in the country within around three days, a senior executive said on Friday.

“We have shut down almost around 250 (wells). Remaining are 390 oil wells. The program is expected to finish in three more days. Maybe on 30 or 31 of this month all oil wells in Ada, Gumri, Moleta and Palouge will be shut down,” Hago Bakheed Mahmoud, field operation manager for Petrodar, told reporters at the Palouge oil fields.

He said current output was still between 145,000 and 150,000 barrels a day, adding that the company could resume production within three to four days. Blocks 3 and 7 provide much of South Sudan’s output.

South Sudan is shutting down its oil production, last put by officials at 350,000 bpd in November, to protest against Sudan seizing some southern shipments at a northern port in a dispute over pipeline fees.

Petrodar is a consortium comprising mainly Chinese and Malaysian firms. Analysts estimate its total oil output from South Sudan at 250,000 bpd. (Reporting by Hereward Holland; writing by Ulf Laessing; editing by Keiron Henderson)

http://af.reuters.com/article/sudanNews/idAFL5E8CR3RR20120127

Sudan, South Sudan End Talks on Oil Dispute Without Accord
BusinessWeek
27 (Bloomberg) — South Sudan’s president, Salva Kiir, and Sudanese leader Umar al-Bashir failed to reach an agreement to end an oil dispute between the two countries that led South Sudan to start shutting down its crude production.

Stories of struggling families emerge as Plan steps up relief in South Sudan
Reuters AlertNet (blog)
Our cows were raided and our crops was burned down by them,” said Mary Nyagolol, resident of Likuangole displaced to Pibor town in Jonglei, South Sudan. At least 17, 000 internally displaced persons (IDPs) in two payams of Gumuruk and Likuangole of 

Sudanese Bishop Granted Asylum in US, with Covington’s Help
The BLT: Blog of Legal Times (blog)
Lawyers with Covington & Burling in Washington helped to secure asylum for a Sudanese Episcopalian Bishop after he became a target for his support of South Sudan, the firm said Friday. Bishop Andudu Adam Elnail is a native of the Sudanese province of 

Luke Pachymuthu and Florence TanReuters4:48 a.m. CST, January 27, 2012
SINGAPORE (Reuters)– Sudan has sold at least one cargo of crude seized from South Sudan at millions of dollars discount and is offering more, industry sources said, as Khartoum looks to recover oil revenue from its former civil war foe.A bitter row has escalated between the two over the value of the transit fee landlocked South Sudan should pay for oil pumped north by pipeline through its northern neighbor and exported from Port Sudan.South Sudan is shutting down production in protest after Khartoum blocked exports and seized some of the oil as compensation. South Sudan’s President Salva Kiir accused Khartoum of having “looted” revenues amounting to roughly $815 million from crude cargoes.The seized crude was loaded onto three tankers from January 13-20, South Sudan’s justice ministry said.

Sudan sold one of those cargoes, a 600,000 barrel shipment loaded on the vessel Ratna Shradha, to a North Asian trader. The final price of the sale was unclear, but one trader said that the cargo was sold at a discount as steep as $14 a barrel. That would indicate an $8.4 million discount for the whole cargo versus the last official price charged by the South.

“This is crude from the South sold by the North at a $14 discount to the South’s last selling price,” a Middle East-based crude trader said.

The tanker is heading to Singapore, another source said.

The last time South Sudan sold Nile Blend cargoes, it did so at a premium of $2.50-$3.00 a barrel to the benchmark Indonesian Crude Price, traders said. This would indicate that Sudan has sold the cargo at a discount of around $11 a barrel to the Indonesian price.

Sudan has also loaded two other cargoes of seized Dar Blend crude, but it is not immediately clear if they have sold those. Khartoum had offered these cargoes last week at a discount to official South Sudan prices, traders said. One of them is headed to the United Arab Emirates port of Fujairah, they added.

The South last sold seven cargoes of Dar Blend at discounts between $5 and $11 a barrel to dated Brent. Sudan offered the cargoes at a discount of $15-$16, another source said.

The lure of deeply discounted oil is probably outweighing the risks buyers face of any legal complications for purchasing the cargoes from Sudan.

Buyers could face private arbitration or even be dragged to the International Court of Justice, said a lawyer familiar with contract arbitration said, declining to be identified because he is not authorized to talk to the media.

OFFGUARD

Regular buyers of South Sudan oil were caught offguard when Khartoum started blocking exports in late December.

In addition to the three, at least seven tankers are still waiting at the port to lift December and January cargoes, raking up demurrage costs of $20,000-$22,000 per day, traders and shipbrokers said. Buyers include PetroChina, Glencore, Vitol, Trafigura and Arcadia, they said.

“There was no reason given. They just held back sailing,” a second trader with a Western firm said, adding that demurrage costs and the uncertainty were a “nightmare.”

South Sudan pledged to fully shut its output of 275,000 barrels per day (bpd) in two weeks, a move that could also cut off supplies to equity holders China National Petroleum Corp (CNPC), Malaysia’s Petronas and India’s Oil & Natural Gas Corp.

A third trader said buyers could declare force majeure if they still cannot lift the oil 30 days from the date of loading.

“Force majeure is the last resort if the cargo has not been loaded 30 days after the scheduled loading date. As long as the ship has not loaded the oil,” the trader said.

“It will be complicated to declare force majeure if the oil is already on board. How are you going to discharge the oil back into the shore tanks?”

South Sudan became independent in July under a 2005 peace agreement with Khartoum that ended decades of civil war but both sides have failed to agree how to untangle their oil industries.

(Additional reporting by Yaw Yan Chong and Osamu Tsukimori in TOKYO Editing by Manash Goswami and Simon Webb)


Newly founded South Sudan says northern neighbour is stealing oil and charging too much for access to it pipelinesSouth Sudanese people

South Sudanese people turn out to hear a speech by their president, Salva Kiir. The South has announced the suspension of oil exports through Sudan. Photograph: Reuters

South Sudan official has said it is shutting down more than 900 oil wells after accusing neighbouring Sudan of stealing its oil.

Pagan Amum, the secretary general of South Sudan’s ruling party, said the shutdown would have a big impact on the new nation, which relies heavily on oil revenues, but he would rather see the oil stay in the ground than lose it to Sudan. “That is even worse,” he said.

At the centre of the dispute are pipeline fees being charged by Sudan. All of South Sudan’s oil currently runs through Sudan’s pipelines to Port Sudan for export. Khartoum has asked for $32 per barrel but South Sudan has called this extortion and offered $1 per barrel, which it says is the highest in the world.

The landlocked South on Sunday started to halt oil production after accusing Sudan of stealing $815m worth of its oil. South Sudan broke away from Sudan in July 2011 to form the world’s newest country but the neighbours did not agree on oil transit fees.

The shutdown came a day after South Sudan and Kenya signed a memorandum of understanding to build a pipeline from South Sudan’s oil fields south to Lamu, on the northern Kenyan coast, where a new port is planned.

The project has been a matter of speculation for the last few years, but South Sudan’s oil minister, Stephen Dhieu Dau, said planning would begin as soon as possible. “We do not know exactly when, but the pipeline is a priority for the government,” he said.

Amum said the oil shutdown would be completed within two to three days. He said South Sudan was also approaching Ethiopia about developing a new pipeline that would eventually go to port through Djibouti.

While South Sudan is losing large amounts of money by shutting down its oil industry, Sudan is losing money as well and risks losing future revenue if South Sudan completes new pipelines out if its territory.

http://www.guardian.co.uk/world/2012/jan/26/south-sudan-shuts-oil-wells?newsfeed=true

South Sudan puts its army on maximum alert in oil row escalation

By Ngor Arol Garang

January 25, 2012 (JUBA) – South Sudan on Wednesday said it has put its troops on maximum alert, amid growing tensions with Khartoum over the ongoing oil wealth sharing dispute and reports of air bombing by Sudan inside its borders.

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Soldiers guard a South Sudanese oil refinery, 2009 (AFP)

Yesterday the United Nations High Commissioner for Refugees(UNHCR) condemned aerial bombardment of areas hosting Sudanese refugees in South Sudan.

The bombing which took place on Monday in the Upper Nile state reportedly left one child injured and 14 other people missing. Upper Nile borders Blue Nile state in Sudan, where the Khartoum government is engaged in conflict with rebels.

On Wednesday the spokesperson for the French foreign ministry Bernard Valero condemned the air raid saying it not only endangered civilians living “in dramatic situation” but also United Nations (UN) and International Organisation for Migration (IOM) staff working there.

“This aggression is a violation of international humanitarian law and involves the lives of civilians and humanitarian workers. This is unacceptable,” the French official said.

Valero also said that France is “very concerned” about recent decisions “taken unilaterally” by both Khartoum and Juba which “go against the spirit of friendship and cooperation which they had been able to demonstrate from January to July 2011”.

Valero urged both parties to “demonstrate responsibility” and to reach an agreement at theIntergovernmental Authority on Development special summit, based on the African Union High-level Implementation Panel proposals.

Speaking at a press briefing in Juba International airport upon arrival from Addis Ababa on Wednesday, Majak D’Agoot, South Sudan’s deputy minister of defence said the Government of South Sudan (GoSS) was aware that Khartoum is mobilising support for militia groups operating along the borders with South Sudan.

Agoot said South Sudan’s troops are on maximum alert, to counter any Khartoum-backed aggression.

The South Sudan official said the talks he attended in Ethiopia with Khartoum were fruitless because of the reluctance of the Sudanese delegation to engage “in honest and meaningful discussions”.

Khartoum has been confiscating South Sudanese oil as what it considers payment for arrears in unpaid transit fees. Juba considers the charge of around US$32 per barrel in fees suggested by Khartoum as exorbitant, but it is landlocked and currently has no other pipeline, other than the one under Khartoum’s control, which terminates at Port Sudan.

Juba claims Khartoum has “looted” US$815 billion worth of its oil. Khartoum is demanding around US$1 billion in unpaid fees since July 2011.

As a result of dispute South Sudan has stopped output at more than 300 wells and has reduced production at 600 more.

According to the South’s chief negotiator in talks being held in Addis Ababa, Pagan Amum, output is expected to be reduced from 275,000 to 135,000 barrels per day. He also said US$2.6 billions would be disbursed to Sudan within four years after separation and that US$2.8 billion in South Sudanese arrears be forgiven.

As South Sudan relies on oil revenues for 90 per cent of its economy, the prohibitive costliness and time consuming nature of constructing an alternative pipeline through neighbouring Kenya to the coast at Lamu, the stalemate is unlikely to be tenable for long.

Aleu Ayeny Aleu, a member of the National Assembly from Warrap commended the decision to reduce oil production.

“Nothing much has changed. The standoff on oil have not been resolved”, Agoot told journalists on Wednesday in Juba, but expressed South Sudan’s willingness to negotiate “a fair deal” with Khartoum.

While still at the Addis Ababa summit Agoot told Sudan Tribune that his “profound” knowledge of the Sudanese government made the Sudanese defence minister, Abdel-Rahim Mohammed Hussein reluctant to hold discussions with his delegation.

Agoot served as deputy National Intelligence and Security Service (NISS) in Khartoum during the interim period, before he was appointed as South Sudan’s deputy defence minister after secession on 9 July 2011.

Agoot was accompanied by the general chief of staff of the Sudan People’s Liberation Army, James Hoth Mai.

(ST)

http://www.sudantribune.com/South-Sudan-puts-its-army-on,41406

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Juba, South Sudan:

The Republic of Sudan has suddenly blocked the transportation of South Sudan’s crude oil to the international market. On Christmas Eve all loaded cargo was prevented from leaving, while other cargo was not allowed to load.

Speaking to the press on Tuesday, Minister of Petroleum and Mining Stephen Dhieu Dau said two ships carrying 1.6 million barrels of Dar Blend originating from South Sudan were stopped from leaving the port, and an additional 0.6 million Barrels of Dar Blend were prevented from loading. Yet another two more other ships were prevented from landing at Port Sudan to take possession of 1.2 million barrels of Nile Blend purchased from South Sudan. He strongly condemned the act of preventing loaded ships from leaving the port. “This is unlawful and a violation of international laws and norms.”

The Under Secretary of the Ministry of Information Garang says the blockage has caused the Government of South Sudan to lose a huge sum of money. “At the cost of $118 per barrel, the 1.6 million barrels of Nile Blend would have fetched a huge amount, while each barrel of Dar Blend would secure us $165 million,” he said.

Minister Stephen Dhieu Dau further accused the Government of Sudan of trying to steal the oil resources of South Sudan. The government in Khartoum ordered the foreign oil companies to divert all of South Sudan’s Nile Blend crude oil entitlements for December to the Khartoum and El Obeid refineries. They also ordered 550,000 barrels of Dar Blends Crude oil entitlement for December to be delivered to a Sudan buyer.

“What right have they got to take our oil to sell it to others? Where does this happen in the world?” asked Marial Benjamin the Minister of Information and Broadcasting.

It was also reported that the Government of Sudan also intends to divert 13 percent of Dar Blend oil through its new tie-in pipeline they started constructing between the Petrodar pipeline and the Khartoum refinery.

“Any diversion of South Sudan’s oil without our consent is theft”, said Stephen Stephen Dhieu Dau. “And what right do they have to divert our oil to their refineries”? Marial Benjamin questioned.

To this day, it is not yet clear as to what dishonest plans the Government of Sudan had for the oil it had ordered for diversion to its domestic refineries. There are speculations that Sudan planned to sell South Sudan’s oil to a third party or attempted to “launder” the stolen oil by redirecting it to its own refinery and instead selling its own crude on the world market.

The Government of South Sudan vows to take legal actions against anyone who purchases Sudan’s crude while South Sudan’s oil is being stolen at the same time. “Such illegal acquisitions will find no refuge from South Sudan’s legal authorities and will enjoy no future business with South Sudan,” Stephen Dhieu Dau said.

“We are two different states and each state has got sovereignty over its own resources,” said Marial Benjamin the official spokesman of the government of South Sudan. “There is nowhere in the whole world where a country can interfere and decide on the resources of another country. [For example,] Iraq tried to invade Kuwait and take its oil. The resultant effect of which was clearly seen. If our brothers in Khartoum are thinking that they have another Kuwait which is South Sudan, then they have missed the point.”

By. Yobu Annet

Copyright 2006-2010 The Diplomatic Courier™. All rights reserved. 

http://oilprice.com/Energy/Crude-Oil/Khartoum-Breaks-International-Laws-by-Blocking-South-Sudans-Crude-Oil.html


By Hereward Holland

JUBA | Mon Jan 23, 2012 11:47am EST

(Reuters) – South Sudan said Monday it started shutting down oil production and accused Sudan of seizing $815 million worth of crude, escalating an increasingly bitter row over oil revenues between the former civil war foes.

South Sudan seceded last July under a 2005 peace deal that ended decades of civil war between north and south, but the two have remained locked in a dispute over how to untangle their oil industries.

The new landlocked nation needs to use a northern pipeline and the port of Port Sudan to export its crude but has failed to reach an agreement with Khartoum over a transit fee, prompting Sudan to start seizing oil as compensation.

South Sudan started shutting down oil output Sunday and expected to finish the process within two weeks, government spokesman Barnaba Marial Benjamin told Reuters by phone.

“The task force has been formed for the shutdown and they are already in the fields carrying out the instructions,” he said, listing the Thar Jath field in Unity state as one field where the shutdown had begun.

Officials said in November South Sudan was producing about 350,000 barrels of oil per day.

China is the biggest buyer of oil from the two countries, some 12.99 million barrels last year. That amounted to five percent of last year’s crude imports by China, which is also the top investor in South Sudan’s oilfields.

South Sudan’s President Salva Kiir accused Khartoum of having “looted” revenues amounting to roughly $815 million and building a tie-in pipeline to divert 120,000 barrels per day of southern production flowing through the north.

“Given our history with the administration of (Sudan’s) President Bashir, we realize that, unfortunately, we must prepare for a disruption of revenue that could last many months,” Kiir told parliament in Juba.

The justice ministry in South Sudan’s capital Juba published a list of three vessels it said had been forced to load southern oil at Port Sudan on orders from Khartoum.

The MT Sea Sky loaded 605,784 barrels on January 13/14, the MT Al Nouf around 750,000 barrels on January 16/17 and the MT Ratna Shradha another 600,000 barrels on Jan 19/20, the ministry said.

Officials in Khartoum could not immediately be reached for comment. Foreign Minister Ali Ahmed Karti told Reuters last week that Khartoum was entitled to seize oil to compensate for transit fees.

South Sudanese officials have said they are planning to build a new pipeline to export oil through East Africa, but analysts have expressed skepticism because of the difficulty of carrying out such a project.

“The financial, technical, and political obstacles to the construction of an alternative pipeline are enormous,” Jean-Baptiste Gallopin, an analyst at Control Risks, said.

“I have no doubt both Sudanese governments are under a lot of international pressure to reach an agreement, because the risks of conflict are real at this stage,” Gallopin said.

NO END TO ROW

The two countries are expected to resume oil talks soon, sponsored by the African Union in Addis Ababa, after negotiations were suspended last week.

Sudan’s President Omar Hassan al-Bashir said this month Khartoum would impose a fee since Juba had not paid anything for using northern export facilities since independence.

Khartoum is demanding $1 billion for fees since July and $36 a barrel as a transit fee, officials have said.

South Sudan’s Kiir said his government was planning to reduce its dependence on oil revenues, which make up 98 percent of state income.

“We will need to find other sources of funding. In doing so I have instructed the ministry of financeto initiate contingency plans for revenue collection and allocation,” he said.

Sudan’s civil war devastated much of the south, leaving the new nation one of the least developed in the world.

The row with Sudan has stirred anger among some in South Sudan, where independence is often framed as the culmination of a long struggle against political and economic marginalization.

Underscoring those sentiments, around one thousand people marched to parliament Monday to support the government’s decision to shut down oil production.

The crowd, mostly university students, cheered, waved their fists in the air and carried placards reading: “Looting our oil is a crime” and “We call on the international community to help the infant country.”

(Reporting by Hereward Holland and Alexander Dziadosz; Writing by Ulf Laessing and Alexander Dziadosz, editing by Jane Baird and Jason Neely)

http://www.reuters.com/article/2012/01/23/us-sudan-south-oil-idUSTRE80M1KG20120123

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JUBA, South Sudan — South Sudan said Tuesday that Sudan, its northern neighbor that controls the region’s pipelines, has blocked the movement of 3.4 million barrels of oil belonging to the south since December.

After breaking away from Sudan in July to become the world’s newest country, South Sudan gained control of nearly three quarters of the formerly unified country’s oil fields, which produce around 500,000 barrels per day.

The loss of the oil has cost Khartoum around half of its yearly revenue, and the two countries are currently negotiating revenue sharing and pipeline fees to help the north meet that budget shortfall.

But the South Sudan’s Minister of Petroleum and Mining Stephen Dhieu Dau told a news conference on Tuesday that the north has prevented 3.4 million barrels from reaching the market, and said Sudan ordered 550,000 barrels belonging to the south to be delivered to one of Khartoum’s buyers.

“They want to steal, to loot the resources of South Sudan,” Dau said.

Dau said that one ship carrying 1 million barrels of southern oil was blocked from leaving Port Sudan on Dec. 31, while a second carrying 600,000 barrels was stopped Jan. 3. A third ship entered port on Jan. 6 but has not been allowed to collect its 600,000-barrel cargo. The minister said two more ships scheduled to receive a total of 1.2 million barrels of southern oil have not been allowed to enter the northern port.

“They are still waiting now in international waters on the Red Sea since the 22nd of December,” said Dau.

South Sudan has called the blockade a theft of their natural resources in violation of international law.

Two spokesmen for Sudan’s government did not answer calls seeking comment.

Officials in Khartoum, Sudan’s capital, have proposed a fee of about $36 per barrel for the use of the two pipelines. But the south says the fee amounts to extortion and has instead offered an average of 70 cents per barrel in addition to an aid package totaling $2.6 billion over four years.

The oil agreement still being negotiated is part of a host of outstanding issues from the region’s 2005 Comprehensive Peace Agreement, which ended more than 20 years of civil war between the two sides. After talks in Ethiopia broke down in November, the Sudan’s government threatened to take 23 percent of southern oil shipped through its port as an “in kind” payment of fees.

On Tuesday, Dau said Khartoum was in the “final stages” of constructing a pipeline that would permanently divert 13 percent of all oil shipped through the north. According to Dau the consortium which operates the pipeline, Petrodar, has denounced the action as illegal.

In December, South Sudan accused the north of holding 1.6 million barrels of oil meant in part for China, prompting a visit by a Chinese envoy to help break the deadlocked negotiations.

Another round of oil negotiations are expected to begin Jan. 17. South Sudan has invited China to take part in the talks. South Sudan says it will not allow its resources to be interfered with by Khartoum and has threatened legal action if the blockade continues.

Iraq tried to invade Kuwait because they wanted to take the oil of Kuwait,” said South Sudan government spokesman Barnaba Benjamin Marial. “You know what happened to Saddam Hussein.”

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Sudan halts South Sudan oil shipment

Sudan has blocked a shipment of southern oil after Juba refused to pay customs fees, the foreign ministry said, escalating a row in which the south accuses Khartoum of sabotaging its economy.

South Sudan's chief negotiator, Pagan Amum

South Sudan’s chief negotiator, Pagan Amum, has warned Khartoum against starting ‘economic wars’ over currency and oil transit fees Photo: AFP/GETTY

Sudan has blocked the ship in Port Sudan … When the ship leaves the port, the south has to pay the customs authorities. This is the first time they didn’t pay,” foreign ministry spokesman Al-Obeid Meruh said.

Earlier, he had said the 600,000 barrel crude cargo had been blocked because the Juba government refused to pay the north’s fees for the use of all its oil infrastructure, including its pipeline, refinery and Red Sea port, which is the south’s only export terminal.

Mr Meruh confirmed no agreement had yet been reached between north and south on transit fees, one of the most sensitive of Sudan’s various unresolved issues, following the formal independence of the south on July 9.

He said Khartoum was asking for $32 dollars per barrel.

The ministry of energy and mines in South Sudan, from which 80 per cent of the divided country’s total oil production of 470,000 barrels per day is pumped, accused Khartoum of delaying the negotiations to squeeze the south.

“They want to stop the shipment so that it prolongs the whole process. Khartoum is trying to sabotage the economy of South Sudan,” the ministry’s undersecretary, David Loro, said.

He said a committee of southern officials was currently in Khartoum working to reach an agreement with the Sudanese government on the question of transit fees.

South Sudan sold its July-lifting oil independently, for the first time, at international prices and apparently without interference from Khartoum, shipping around 3.2 million barrels from Port Sudan.

Since then, however, South Sudan’s chief negotiator, Pagan Amum, has warned Khartoum against starting “economic wars” over currency and oil transit fees, and has said the charges that it had imposed amounted to “daylight robbery.”

He said Sudan should set its transit fees according to “international standards,” and cited the figure of $1.8 a barrel charged by other states with similar arrangements, reflecting how far apart the two sides are on the issue.

North and South Sudan both depend heavily on their oil receipts, with Khartoum’s cash-strapped government desperate to offset its loss of southern oil revenues, which represented some 36 per cent of its income prior to partition.

Just weeks before the south seceded, Sudan’s President Omar al-Bashir threatened to deny the landlocked south access to the north’s oil infrastructure if no deal was reached.

The World Bank, meanwhile, warned last month that the Juba government urgently needed to develop the new nation’s agricultural sector to lessen its reliance on oil, which accounts for more than 95 per cent of its total revenues.

Sudan halts southern oil shipment

By Ulf Laessing and Hereward Holland

KHARTOUM/JUBA | Fri Aug 5, 2011 4:11pm EDT

(Reuters) – North Sudan has halted an oil shipment from landlocked South Sudan in a dispute over customs fees, it said on Friday, signaling a rise in tensions that could disrupt supplies from one of Africa’s largest producers.

For use of its oil facilities, North Sudan has demanded fees worth a third of the export value of South Sudan, which became independent last month, after a referendum in January agreed under a 2005 peace deal that ended decades of civil war.

The halting of a 600,000 barrels crude cargo in Port Sudan signals mounting tensions over how to share oil revenues.

The South took 75 percent of the country’s 500,000 barrels a day of oil production, Africa’s fifth largest. But it depends on the North to use the only cross-border pipeline to the Red Sea outlet of Port Sudan to sell the oil.

On Friday, customs authorities in Port Sudan stopped one shipment because duties had not been paid, a spokesman for the foreign ministry in Khartoum said without giving other details.

“Customs asked for the fees to be paid. They paid last time but not this time,” the spokesman said.

He said the action had been the decision of the customs authorities and was not related to current talks between North and South about sharing oil revenues.

The two sides have failed so far to reach an agreement on a transit fee to be paid by the South. Until now both split equally the oil, the lifeline of both economies.

Khartoum is asking for $32 a barrel to use its port, the pipeline and refineries to sell the southern oil, the spokesman said. This is worth roughly a third of South Sudan’s export value at current prices. according to Reuters calculations.

“This has to be negotiated. There is no agreement yet,” he said, adding that other proposals such as a fixed sum instead of a transit fee were being discussed.

A South Sudan official sought to ease the oil tensions.

“We don’t interpret this as a rejection by Khartoum. I do not think this is politically motivated,” said David Loro Gubek, undersecretary at the ministry of energy and mining in Juba.

“There are certain procedures at the port that have to be followed. We will wait for clarification tomorrow.”

Tensions had seemed to have eased at the end of last month when South Sudan said it saw progress in oil sharing talks with the North only a week after accusing it of waging economic war by demanding a very high pipeline transit fee.

Last month, the northern parliament approved an alternative 2011 budget that lawmakers said included an annual income of $2.6 billion for transit fees — the same amount expected for the loss of southern oil production.

Refineries are located only in the North. Experts say southern plans to connect to a pipeline in east African neighbor Kenya are years away.

Analysts say Sudan has had little transparency for years about how oil revenues are booked. The country has endured conflict, inflation, corruption and U.S. trade sanctions.

Apart from sharing oil revenues, both sides need to end violence in some parts of their shared border and need to divide up other assets and debt.

Some 2 million people died in Sudan in a decades-long conflict over religion, ethnicity, ideology and oil, although the secession last month was very peaceful.

Sudanese oil flows mainly to Asia, with China buying more than a half of total volumes. South Sudan’s production is dominated by Chinese and Indian companies, which have been marketing their crude themselves so far.

Last month, South Sudan also signed a deal with trading house Glencore to help it market crude but a dispute between various officials has threatened to derail the agreement.

(Writing by Dmitry Zhdannikov; Editing by Anthony Barker and David Gregorio)

  Sudan reportedly blocks South’s oil shipment

August 4, 2011 (KHARTOUM) – A shipment of oil produced in South Sudan has been prevented from leaving Port Sudan for dispute over fees, an official in Juba said today.

JPEG - 39.5 kb
Sudan’s new currency sits behind a window at the central bank in Khartoum, Sudan (AP)

Garang Deng, South Sudan’s oil minister, said that the oil tanker contained 600,000 barrels and that Port Sudan authorities refused to let it proceed to its destination unless it service fees are paid upfront.

“We have failed to reach solutions with the government of Sudan that would guarantee that the ship would depart at the specified time,” Deng said.

“I have contacted the finance and energy ministers of the Northern government but they refused to talk about it on the pretext that they have meetings” he added.

The South Sudan official warned that shipment delay could inflict penalties on Juba according to the terms of the contract with the buyers. He provided no details on who the sale was made to or the price.

The oil-rich nation became an independent state last month after its citizens voted almost unanimously in favor of secession from the Arab-Muslim dominated north. But the latter contains the infrastructure and pipelines that transports the oil from the landlocked South to Port Sudan.

Both sides are still negotiating the transit fees to be assessed per barrel for usage of the pipelines. The figures proposed by Khartoum initially were called “daylight robbery” by Juba.

South Sudan officials have threatened to seek other venues to export their oil and rejected any revenue sharing arrangement similar to the one that was in place prior to July 9th.

The first oil shipment containing 1 million barrels was made in July out of Port Sudan without any issues.

But many observers believe that there are mounting signs of an economic warfare between the two countries.

In recent weeks Khartoum and Juba traded accusations over the almost simultaneous introduction of new currency in the two countries.

The ruling National Congress Party (NCP) in Sudan said that the South breached an understanding that the North and South would maintain one currency for an interim period of at least six months.

Furthermore, the situation got more tense after Sudan said it rejected a request from the South that old Sudanese pound in circulation in the new country be exchanged with foreign currency or used in bilateral trade.

It is estimated that $700 million worth of old Sudanese pound is circulated in South Sudan. Khartoum said it has taken measures to prevent the old notes from being sneaked from their Southern neighbor.

This week, the Central Bank of South Sudan reduced the window for exchanging the old Sudanese pound from 90 days to 45. The North on the other hand said banks would open once again over the Friday-Saturday weekend to allow citizens to get new notes to “speed up” the process.

While the South would be hit if the old pound it had bought for dollars in the run-up to independence would be worthless, there is also a risk for the north: If the south tried exporting old notes back there it would add to inflationary pressures.

(ST)