Home | News    Thursday 1 December 2011

South Sudan threatens to suspend oil production if north imposes charges unilaterally

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November 30, 2011 (JUBA) – The South Sudan government on Wednesday reacted negatively to reports that Sudan plans to take 23% of the new country’s oil exports, saying it will consider suspending oil production if north Sudan continues to impose high transportation and refinery costs.

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Sabir Mohamed Hassan, Sudan’s co-chair of negotiations on economic issues, speaks at a news conference in Khartoum November 30, 2011 (Reuters)

Agence France Presse (AFP) quoted an anonymous senior official at north Sudan’s oil ministry as saying, "In the interim period, we are not going to charge the full fee. We will deduct about 23 percent as payment in kind."

Talks between the North and South collapsed once again on Wednesday after the African Union High Panel Implementation (AUHIP) failed to resolve differences between two the countries.

Speaking to Sudan Tribune shortly after his arrival from the Ethiopian capital Addis Ababa, Stephen Dhieu Dau, South Sudan’s oil minister said no agreement has been reached on what his landlocked country would pay as charges to Khartoum.

After South Sudan’s independence in July, the only way to export oil has been through north Sudan. The new country has been pondering building a pipeline that runs through neighboring Kenya will but analysts say it will take years to build.

“To the best of my knowledge, there was no agreement on charges. The Sudanese delegation did not accept our proposal. They insisted on demanding $36 dollar per barrel. This was very expensive charge to accept. So we reject their demand because it is discriminatory. It is not a charged based on a cost principle," Dau said.

“This is a clear discrimination. They are [Khartoum] demanding charges not based on any principle. This was [why we] did not reach any compromise because they were not negotiating with us”, said the senior member of the delegation.

Attempts by Sudan Tribune to reach Pagan Amum, the Secretary General of South Sudan’s ruling Sudan People’s Liberation Movement (SPLM) and the leader of Juba’s delegation failed on Wednesday evening. His aides said he was tired and resting.

Dau said that if Khartoum did not change its stance, South Sudan may be forced to stop exporting oil through north Sudan. This week Khartoum announced that it would stop allowing South Sudanese oil to be exported through Port Sudan but then appeared to reverse its position.

Sudan’s oil ministry said on Monday that it had blocked southern exports, claiming the Juba government had failed to pay transit fees of $727 million covering the period from July until the end of October.

But a foreign ministry spokesperson said that north Sudan was determined to get a percentage of South Sudan’s oil exports even if no agreement has been reached on transit fees but without forcibly closing the pipelines.

Less than five months ago South Sudan became the world’s newest country after voting for independence in a January vote, taking with it three-quarters of the country’s oil.

“There is no immediate alternative. The only option which I think will not be in the best interest of both the north and us is to suspend oil production because there are no storage facilities at the Port Sudan export terminal”, Dau said.

The oil minister said his government did not want to stop exporting oil but said that it was an option if Khartoum continues to prevent oil from leaving the Port Sudan and reaching the international market.

In such a situation, “the only option will lead to full shutdown”, Dau said.

But Sabir Mohamed Hassan, Khartoum’s chief negotiator on economic issues claimed, after returning from the talks in Ethiopia, that the south was in fact continuing to ship its oil through the north.

"The south has access [to our facilities] and it will continue to export, and it is in our interests that they continue to export through our territory," he told a news conference.

"[But] we’ve told them that we have a responsibility to take our dues in kind, and that is exactly what has happened in the past few days," he added.

Khartoum and Juba are locked in a bitter dispute over how much the south, which gained independence in July and produced some 75 percent of the country’s 450,000-500,000 barrels of oil per day before independence, should pay to use the north’s infrastructure.

The escalating dispute prompted China, the largest foreign investor and main buyer of Sudanese oil, to urge both sides on Tuesday to "exercise restraint" in their negotiations.

The Chinese ambassador in Sudan Luo Xiaoguang described Khartoum’s decision as “very serious and unjustified”.

Xiaoguang further told the pro-government al-Rayaam newspaper in remarks published yesterday that there is no reason to stop the exporting of oil as long as there are negotiations now underway between the two countries in Addis Ababa.

(ST)

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  • 1 December 2011 10:15, by omoni jr.

    Bravo Juba administration ,
    please do and find another alternatives, there are too many ways of killing a rats.

    repondre message

    • 2 December 2011 07:53, by sober

      You running away but you can’t run away from yourself, that what Bob Marly song once a day. You running away but you can’t run away from north Sudan. You desperately be in need of north. ha haa haaa.

      repondre message

    • 2 December 2011 08:28, by sober

      omoni jr.
      I’m help you to find an alternative , hahaaaha
      (Japan’s Toyota Tsusho, the trading and investment arm of Toyota, is looking to put up and run an oil pipeline linking South Sudan with Kenya’s proposed second port of Lamu, the firm said
      The deal was, however, delayed due to Kenya’s lack of capacity to process Sudan’s oil which is of a heavy variety compared to the United Arab Emirates M

      repondre message

  • 1 December 2011 10:26, by mohammed ali

    Pagan went to have booze!If they think they can transport it for free then they are wrong! We will take our dues untill an agreement is reached!

    repondre message

    • 1 December 2011 10:43, by Ambago

      Mohammed Ali

      Now we know the secret. It’s the Chinese who are badly in need of our Oil. So be it. Until you and your bigots of the NCP stop depending on the "Kafir" China for both military and diplomatic face lifting , you guys are in troublooooo!
      4 pence a barrel, deal, fine . No deal China will still buy our Oil and ship it through Port Sudan. Is this understood!

      repondre message

      • 1 December 2011 11:05, by mohammed ali

        Ambago,we will not for you, we will take our dues directly from Port Sudan!Is that clear! Your masters are lining up begging China, and soon you will be without "the weekly handout" of the British Taxpayer as they are now fighting for their pension! You better take Asylum with us here where we educated and fed you, in the free SS you will go to jail like mawalan Peter Abdurhaman Soule!

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        • 1 December 2011 11:31, by Xeno

          Mohammed Ali,

          Go and get help bro. you have no point to make, even Allah knows. I know peter soule was one of your puppets trying to start fighting in the south in order to get his hand on your dirty money....hahah, he failed and ended up in jail...and so do many other arabized minds in black skins

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      • 1 December 2011 11:21, by Xeno

        Ambago,

        You are great man and I hope Mohammed Ali, in his right mind would understand that simplifications you have presented. Those people, the ncp henchmen do not read btn the line in their volumnous marriage btn Beshier and China. They should know by now if the south oil stop flowing in that dump pipe, there could be a divorce btn ncp and china in no time.

        repondre message

      • 1 December 2011 12:16, by Jay

        Here are some of the things Northerners don’t understand, the pipeline they claimed to be theirs was built with 80% of South Sudan share and so do all the storage facilities all over the country. The notion that somehow we should pay for all these facilities proved how ludicrous they’re!

        repondre message

        • 1 December 2011 12:35, by Jay

          The question for the northerners is; what country in her right mind would pay $ 36.00 per barrel? Oil is the most valuable commodity now in the world; therefore, it doesn’t have to go through Port Sudan. The customer will come for it in the south Chinese has investment all over Africa shipping route will not be a hassle to them.

          repondre message

          • 1 December 2011 12:39, by Jay

            All South need to do is shut pipeline down, sent an application the IMF for a ten year loan of a $ 100 billion. Oil in the south is a guarantee asset that will secure 10 years $ 100 billion loan from the IMF. All the IMF need to do is review South Sudan assets and the loan can be approved with no hesitation.

            repondre message

        • 1 December 2011 12:45, by Sam.Eto

          Here are some of the things Northerners don’t understand, the pipeline they claimed to be theirs was built with 80% of South Sudan share !!

          Where do you drunken idiots get these ideas. Oil was shared 50-50. South Sudan got its share in full !! Even before the CPA in 2003 - South was getting a share. But then it was one country so YOU HAVE NO RIGHT TO CALL IT OURS !! A court or UN would laugh !

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          • 1 December 2011 14:04, by DeltaBravo

            To SAM
            The oil in Sudan was discovered in 1978. Did we get any share since not really,So where the is the share for 27 years, that you been spending without Sudanese knowledge. The Government been buying weapons to scared the Citizen and you are the cheer leading this racist and Cruel to their Citizen. So please don’t be blind in your own corner. Look around and see what is this government.

            repondre message

          • 1 December 2011 23:43, by Jay

            What percent of oil revenue did Sudan lost to South Sudan now? If you answer that question correctly then you will understand my statement of 80% of South Sudan share.

            repondre message

    • 1 December 2011 11:08, by Lorolokin

      Mohammed ,
      Who is in need of who ? We need you or you need us ? Mohammed,if China take one step against you like what Kenya has done then you will smell your own fieces.
      MARK MY TONGUE.
      Kinkak

      repondre message

      • 1 December 2011 11:22, by mohammed ali

        LORKOLIN,you are alwayes smelling your fices! Have you got toilets!or you are still walking naked?!you better watch your words! We both need each other, but you need us much more! We will need our pipeline very soon and 99% of your budget will evapourate!Already 30% of it is annually loooted!http://southsudannation.com/gettingtoughon%20joanadams78.htm. $ 1.3 billions looted! by the freedom fighers

        repondre message

      • 1 December 2011 12:29, by Dekery

        Haha... Kikkak,

        I like what you pointed out to this M. Ali

        Just a single call from China to Khartoum will let every one to el nono cry

        Dekery

        repondre message

      • 2 December 2011 09:03, by Bungachier 50

        Sawa Ngutu Lobijo!

        Mr. Mohammed is just cracking our mines and he knows the truth of the matter, indeed if he is the TRUE MOHAMMED.

        The other thing that you people must know here is that, this person who calls himself MOHAMMED on the website might even be one of us (South Sudanese).

        He might be writing all these to create an arguement on the website. Get these facts.

        repondre message

    • 1 December 2011 16:50, by mon-mandhal

      Who cares abuot this chines robbet which always drives were they ( chines ) instructe it to go? it was less than 72 hrs that Ncp leader changed his mind $ simply revese the discion in favoring their masters.

      repondre message

    • 1 December 2011 20:34, by SSLA/M Supporter

      Those ridicules SPLA/M Mules and bush politicians are jokey even with the serious issues like this one! Those politicians are lucky because they are leading stone-minded populations that don’t know what their rights, therefore enabling those amateur and bush politicians to get away with everything they should have been held accountable for!

      repondre message

      • 1 December 2011 20:39, by SSLA/M Supporter

        I wonder when will our southern Sudanese masses wake up and stand tall for their rights that are being violated by that SPLA/M corrupt militia! They are talking to stop exporting the oil via Port Sudan because they stole enough monies for themselves and their immediate families or next of kin from previous oil shipments....

        repondre message

        • 1 December 2011 20:49, by SSLA/M Supporter

          and thus they won’t be affected by the lack of incomes that will result from down turn of their irrational decision of halting the oil export and regardless of all this no one from Southern Sudanese will bother them and hold them accountable for those irresponsible decisions! what a stupid people!

          repondre message

  • 1 December 2011 10:33, by Dekery

    Yes I agree with you,

    Its only one to two years building or constracting a pipline through Kenyi to Lamu or Mombasa to sell our oil to the international market

    I do not agree continueing sharing our oil with hynese, they have benefited during the past years of struggle as such they should not be allowed even a single dollar per barrel

    Dekery

    repondre message

    • 1 December 2011 10:46, by Chier Akueny

      Mahammod Ali will cry if South Sudan continues to say so. That is why Arabs in the North hate Pagan because he a leader of fact and he doesn’t fear. So, mind Northerners that you are not going to gain anything in such crookness and unless you apologize and join South Sudan to sail you out of problems. Your leaders are indicted by international Court and yet you don’t try to improve your rudeness.

      repondre message

  • 1 December 2011 10:38, by Letigolight

    A Jallaba government will never enjoy seeing South Sudan succeed for as long as they are handling crises - social, economic and political. Juba should ground all forms of cooperation with Khartoum and save the ears of South Sudanese citizens from this Khartoum VIRUS. RSS, disengage with khartoum and lead your citizens away from these traitors!!!!

    repondre message

  • 1 December 2011 10:41, by Mapuor

    Thats the bravest decision that should be taken by the South Sudan government.We all depend on oil.Sudan should not pretend to have other sustainable means to its ramshackle economy.Should oil production stop today,both countries would be crying.We need to have princilpes that tally with international standards.

    repondre message

  • 1 December 2011 10:45, by Letigolight

    Sudan and Some quarters of the world are now asking South Sudan to "compensate" khartoum for using oil infrastructure, fiscal gap after separation and so on..., but no one talked about any reparation that Khartoum has to pay for the 2.5 million lives lost!!!!; let the World Bank and AUHIP also give us a figure for this!!!!!

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    • 1 December 2011 11:02, by Dekery

      Reparation is the most first important thing our leaders would have ask Khartoum to compensate the millions lives

      But I hope it will one day come up even in 10 to 20 years like that of Rwanda and other European Countries

      Dekery

      repondre message

  • 1 December 2011 11:00, by Eastern

    I would like to be educated on the status of the oil facilities Sudan republic is managing. Was this not a national asset for the then republic of the Sudan where South Sudan was part of? Did South Sudan get its shares of the facilities (refinaries, pipe lines, port facilities, etc)for the oil industry. If South Sudan can be denied use of the facilities then why should South Sudan be asked to take

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  • 1 December 2011 11:07, by Eastern

    ...some of the burden of the external debts incurred by the Arab stocks when the government in Juba was not party to the borrowing and spending spree. Let South Sudan share in the oil facilities be given in kind or in cash (selling th oil facilities to an international company through transperant and competitive bidding process)to avert future ownership threats from Sudan.

    repondre message

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