February 22, 2012 (JUBA) - South Sudan on Wednesday said it has given the president of Petrodar - a Chino-Malaysian oil company - 72 hours to leave the country, accusing him of not cooperating with the government and continuing to receive instructions from the government in Khartoum.
- Liu Yingcai, former Petrodar president
Stephen Dhieu Dau, the country’s oil minister told reporters on Wednesday that some oil companies in South Sudan were not respecting the terms of reference of the memorandum of understanding which they signed in December.
He said that violating this agreement had forced the government to announce the expulsion of Liu Yingcai, head of the Petrodar on Tuesday.
Petrodar is a consortium comprised mainly of China National Petroleum Corporation (CNPC) with a 41 percent stake and Malaysia’s Petronas with 40 percent.
The government is also annoyed that Petrodar has not transferred it’s main office from Khartoum to Juba, the capital of the republic of South Sudan.
South Sudan seceded from the north in July last year taking with it 75% of the oil reserves that existed under the united country.
Talks between Khartoum and Juba over the fees South Sudan should pay to export it’s oil using the north’s infrastructure have failed to bring the sides to an agreement.
Juba is demanding $1 a barrel while Khartoum wants $36. Efforts by the African Union (AU) mediation team in Addis Ababa have so far failed.
The Sudanese government is demanding 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 accuses its northern neighbour of "looting" $815 million in oil revenues and has responded by shutting down oil production completely last month.
Juba says that Khartoum has illegally sold at least three shipments of it’s oil, including 600,000 barrels on ship awaiting to dock in Japan, and has vowed to sue any company that purchases southern crude from North Sudan.
South Sudan has accused unspecified oil companies of collaborating with Khartoum in “stealing” and marketing the crude it confiscated. Petrodar deny this insisting they have complied with all instructions from Juba.
The government further accused Petrodar of lack of cooperation in the implementation of the government’s decision to shut down oil production and negligence on the impacts of oil operations on the environment.
South Sudan also accuses the Chinese-Malaysian company of dishonesty. The ministry of petroleum says that when it went through the process of stopping production it discovered that the company was producing 40,000 barrels per day (bpd) more than the 230,000 bpd it was declaring.
Many government officials regard the expulsion of the PetroDar president as a new start for South Sudan, so the new country can deal with irregularities in the oil sector.
On Wednesday South Sudan said it has started reviewing all oil contracts signed by the Khartoum government, while the country was still united - a departure from it’s previous policy.
PetroDar hold concessions in Palloj in Upper Nile state, where South Sudan was producing over 60 percent of its crude oil before the shutdown.
The oil crisis is one of many raising fears of a return to war between the two countries. Decades of civil war, leading up to the 2005 peace deal that gave South Sudan the right to secede, left 2 million dead and over 4 million displaced, according to the UN.