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December 9, 2011 (WASHINGTON) – The United States Treasury Department’s Office of Foreign Assets Control (OFAC) announced on Thursday that it will allow exports of oil equipment to South Sudan without special permission.
OFAC said it is “issuing two general licenses that authorize all activities and transactions relating to the petroleum and petrochemical industries in the Republic of South Sudan and related financial transactions and the transshipment of goods, technology, and services through Sudan to or from the Republic of South Sudan and related financial transactions”.
South Sudan became an independent state last July and U.S. officials have promised that the new state would quickly be exempted from the comprehensive sanctions imposed on Sudan since 1997.
Based on the new rules U.S. companies can also export equipments through Sudan as long as South Sudan is the final destination.
But OFAC cautioned that U.S. companies remain barred from participating in refining Southern Sudanese crude oil in refineries located in Sudan.
Last September, the U.S. special envoy to Sudan Princeton Lyman said that lifting all sanctions on South Sudan will take time because it needs congressional approval.
North Sudan lost 75 percent of the country’s oil production of 500,000 barrels per day after South Sudan gained independence. The impact of the loss is being felt in the country through a chronic shortage in hard currency and tightened government spending.
Sudan has been hoping that transit fees for oil produced in landlocked South Sudan could provide a reliable source of revenue.
But the two sides have failed to agree on the fees to be assessed for using the pipelines in the North.
China, which has the largest stake in Sudan’s oil, dispatched its envoy in a bid to bridge differences between the two ex-foes on this issue.
(ST)
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