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Wednesday 22, 2012 (JUBA/LONDON) - A British Court has ruled that an oil tanker carrying oil, which South Sudan claims was exported illegally by North Sudan, should be unloaded in Japan, shipping sources have told the Reuters news agency.
Since seceding from Sudan in July last year South Sudan has been unable to agree a new oil deal with Khartoum and last month stopped all production, accusing the north of siphoning off oil and seizing its oil in Port Sudan.
Landlocked South Sudan has threatened to sue any company who buys it’s oil from north Sudan.
The tanker, which has yet to be given permission to dock at the Kiire terminal, according to Reuters’ sources, is carrying 600,000 barrels of crude oil that South Sudan says was stolen by North Sudan in January and sold at a large discount to a North Asian oil trader.
The disputed shipment has been forced to wait outside the Japanese port for two weeks and the tanker - the Ratna Shradha - is not scheduled to unload this week, according to Reuters sources.
Once the disputed nature of the oil emerged the case was referred to a British commercial court on 15 February by Chambal Fertilisers and Chemicals Ltd, which owns India Steamship the company carrying the oil.
At least two traders have informed Reuters that the cargo had been bought by JX Nippon Oil and Energy, who have declined to comment on the matter.
A court official in London has said that the defendants in the case are the Republic of Sudan, the Republic of South Sudan and Union de Banques Arabes et Francaises, Reuters reports.
The South Sudanese government have also accused Geneva-based Trafigura, the world’s third largest oil trader, of purchasing oil it claims was seized illegally by north Sudan.
As well as the Ratna Shradha, awaiting to unload its controversial cargo in Japan, Salva Kiir, South Sudan’s president, claims that there are at least two other tankers of southern crude that have also been sold by north Sudan.
"Looting or "payment in kind?"
Khartoum claims that Juba owe over $1billion in unpaid fees since July last year when the previous deal expired coinciding with South Sudan’s independence.
South Sudan denies it has not been paying fees and says it is only willing to pay $1 for each barrel of oil exported through northern pipelines. North Sudan is demanding over $30 per barrel.
South Sudan accuses its new neighbour of "looting" $815 million in oil revenues, which includes the value of the 600,000 barrels on the Ratna Shradha. Khartoum, however, says that the confiscated oil is payment in kind for unpaid transit fees.
Last week a southern official said Sudan had confiscated more than 6 million barrels of South Sudan’s oil since December as part of the row, triggering their decision to stop oil production.
The stand off will negatively affect both economies, especially South Sudan, which until last month relied on oil revenues for 98% of it budget. The South’s bold decision has been described as economic suicide by one prominent Sudan analyst, Alex de Waal.
Majak D’Agoot, South Sudan’s deputy defense minister told journalists earlier this month that the pipeline would remain closed until Sudan accepts South Sudan’s demands.
When oil production stopped in January oil production was at about 350,000 barrels a day, a decline since independence, in part due to a brain drain of northern engineers.
Oil, citizenship, border and debt are some of the many issues being negotiated in Ethiopian capital Addis Ababa.
The talks, held under the auspices of the African Union mediating team led by former South African president Thabo Mbeki, succeeded in persuading the two sides to sign a non-aggression deal on the first day of the meetings but failed to persuade the two sides to make concessions on their demands.
Agoot, who led his side in the security negotiations, said the oil talks are much tougher because Khartoum was not able to provide reasons for asking for such high fees.
"They took an extreme gamble, which was unnecessary. All they need to do is have rational expectations. If they are beginning to entertain rational expectations and not to expect they can take what they don’t deserve from South Sudan’s oil, then we can reach a deal," he says.
Juba Reaction
South Sudan’s capital Juba, was so consumed by the oil crisis and tense North-South relations on Tuesday that it’s finance minister failed to show up for his weekly press briefing.
In the seven month’s since South Sudan’s independence tensions over oil, minor clashes along the ill-defined contested border, bombing of South Sudan by the north and the ongoing dispute over the territory of Abyei have brought the two sides closer to a return to war than they have been since the 2005 peace deal, officials have said.
South Sudan has often accused Khartoum of reluctance to implement some of the remaining issues in the 2005 peace accord, which ended over two decades of conflict in which 2 million lives were lost. An additional 4 million people were displaced by the conflict.
George Garang Deng, an undersecretary in the ministry of information and broadcasting on Tuesday said the country’s minister of finance had cancelled his initial plan to address journalists at a weekly press briefing because he had to attend “pressing” issues.
Taking the press conference himself, the third top official in the information ministry accused Khartoum of "beating drums of war" and amassing troops on the border - an allegation also made by Khartoum against the South.
Deng also repeated Juba’s denial that turning off the oil - denying Sudan vital foreign currency to aide its flagging economy - was part of an attempt to bring about regime change.
Juba is accused of supporting groups in South Kordofan and Blue Nile, which were it’s allies during the civil war. Claims by South Sudan’s ruling SPLM that it has cut ties with the SPLM northern sector are given short shrift by Sudan’s military and ruling elite.
(ST)
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