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South Sudan will resume exporting oil through north only if "fair deal" reached

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By Ngor Arol Garang

January 21, 2012 (JUBA) - South Sudan on Saturday said it will resume exporting its crude oil to international markets through north Sudan if the government in Khartoum agrees to a "fair" transit fee and returns confiscated oil.

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South Sudan Oil Minster Stephen Dhieu Dau (AFP)

“Oil companies have received instructions to cease operations with immediate effect. They have been asked to stop all oil related operations until a fair deal is reached with Khartoum else it will remain closed till when we shall develops our own oil infrastructure”, Stephen Dhieu Dau, the country’s oil minister told Sudan Tribune on Saturday.

The landlocked country is considering building a pipeline to the Kenyan port of Lamu to avoid using north Sudan’s Port Sudan.

Dau said his ministry was determined to exert all efforts including pursing legal measures to return the oil, which he said has been stolen by Khartoum.

“We will not just stop with the closure of the pipeline. We will proceed with all legal processes and procedures to retrieve the oil which has been stolen by Khartoum throughout 2011. We will never give up until the stolen oil is brought back to its rightful owners," he said.

Dau also warned potential buyers that legal procedures would be taken to trace any companies that buys its oil from north Sudan.

North Sudan says the oil has been taken as payment in kind for unpaid fees of up to $1 billion. However, South Sudan says that it has paid the north to use its pipelines and refineries claiming that $350 million worth of its oil has already been diverted and $400 million of it has been prevented from leaving from leaving Port Sudan.

Sudan wants $36 a barrel as a transit fee, which is roughly a third of its value, and for Juba to share the north’s $38 billion national debt. Juba wants to pay a much smaller fee similar to the rate Chad pays to export it’s oil through West Africa.

From 2005 until July last year the north and south shared South Sudan’s oil 50:50 as part of a peace deal that ended decades of conflict. But no agreement was made on what arrangements would replace the deal once South Sudan became independent in July 2011.

South Sudan’s oil minister said his government is aware of the challenges associated with the closure of production, which is expected to take up to two weeks to complete.

Juba says it will be able to last for up to 18 months without exporting oil if Khartoum does not change its stance, estimating that it would take less than a year to build the pipeline.

Khartoum has said that the decision will damage both country’s economies. But Sudan’s president Omer Hassan al-Bashir has recently admitted that his country will be negatively affected if the South decides to halt oil production, but warned that Juba has more to lose from such step as revenues from oil make up 98% of the Southern budget.

After South Sudan took 75% of Sudan’s oil with it when it seceded, the north’s finances have been seriously effected, triggering inflation and higher food prices due to a lack of hard currency.

Dau admitted that shutting down the pipeline was not in South Sudan’s interest but said that it was the only option it could make in order to protect its resources.

In a letter seen by Sudan Tribune on Saturday Minister Dau gave a timeline of Juba’s version of events:

  • On the 24th Dec. 2011, government of Sudan (GOS) prevented loading of 600,000 bbls of South Sudan-Nile blend;
  • On the 30th, Dec. 2011, GOS detained 1000,000 bbls Dar blend sold to Vitol;
  • On the 31st, Dec. 2011, GOS prevented ships from loading 600,000 bbls of RSS Nile blend;
  • On the 3rd, Jan. 2012, GOS detained vessels loaded with 600,000 bbls of Dar blend of RSS which belongs to Petronile;
  • On the 8th, Jan. 2012, GOS detained Sinopec vessels loaded with 900,000bbls Dar blend of RSS;
  • On the 13th, Jan. 2012, GOS lifted 605,784 bbls Dar blend crude oil of RSS;
  • On the 16th, Jan. 2012, GOS lifted by force 618712 bbls Dar blend crude oil of Republic of South Sudan.
  • Also on the same date, GOS instructed PDOC to transfer 120,000 bbls of Dar blend crude oil of RSS to be delivered to Khartoum refinery directly from the illegal pipeline tie into KRC which was partly constructed and operated by GOS;
  • On the 19th, Jan. 2012, GOS lifted by force 600,000 bbls of RSS’ Nile blend crude oil.

The two neighbours have to come to agreement on a host of post-secession issues including national debt, assets, border demarcation, the disputed oil producing region on Abyei and citizenship.

South Sudan said on Friday that it will continue to negotiate with Khartoum over post-independence issues despite announcing that it was halting oil production over the transit fees dispute.

So far the African Union mediated talks, led by former South African president Thabi Mbeki, have failed to resolve the dispute.

Relations have also been strained with both accusing the other of supporting rebels in their territory. Both countries deny this.

(ST)

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Kind regards,

The Sudan Tribune editorial team.
  • 22 January 2012 07:17, by Augustino

    Hi South Sudanese, please try to reverse your decision, you are young country that needs resources, Kharoum had looted this oil for long when we were busy with war, now they dragged us to the situation of loss while they conyinue using their looted resources. I dvice you to rethink over this issue, please pay due fees at right amount to enable us solve our problems now.Thanks. Monykuch in Australi

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    • 22 January 2012 14:27, by Lang

      Do you realize Khartoum is asking for $6 billion in fabricated arrears because of this ridiculous $36 fee??

      $6 billion in made up arrears makes up close to a third of South Sudan’s yearly revenue from oil exports. You think this is fair at all? Don’t be stupid like unreasonable northerners.

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  • 22 January 2012 07:33, by opoka charles otim

    Some people are happy to see that happen,but Ur excellency the minister,truely option for an olternative is the best and a permanent solution to Northern act of stealling.This is a broad daylight robbery from Bashir’s Government and the world have already known.thank you.

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  • 22 January 2012 07:51, by Konan

    I believe the proposals presented by the two countries are for supporting their stands on negotiation table and fair and amicable agreement will be reached soon. USD 32.00 as transit fee is too high and unreasonable while USD 1.00 is also too less and unacceptable and cannot be compared to the fee that Chad is paying to Cameron because the later doesn’t own the pipeline while Sudan do.

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    • 22 January 2012 08:30, by Daniel Buolmawei

      Now, you become reasonable people Mr. Konan, something I never see you doing it for all these times. When did you come to realize that $32 dollars per barrel is unreasonable?

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      • 22 January 2012 09:06, by Konan

        Daniel Buolmawei,

        I haven’t ever said that USD 32 is fair. I have direct question to you guys for argument purpose, just imagine the opposite is happening, you live in North and we live in South, would you allow us to export our oil for seven months for free or USD 1.00 per barrel???? Pls. be fair and answer this question with good faith.

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  • 22 January 2012 08:03, by George Bol

    Sudan has shown the desperate of seeking our resources by use of force but that demonstrate their illegal act against the national standard.The decision of the South Sudan is in right position. Now, we have caught the thieve,then how are we going to let our money back and how can we prevent them from stealing more oil?I don’t want their port anymore and we should be responding to these Arab

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  • 22 January 2012 08:14, by Padiet Deng Alony

    South Sudan will regret later if they resume exporting its crude oil through north sudan. that page of exporting our oil through north should be ignored for good and concentrated for other alternatives.

    Building new pipeline as suggested

    2nd build two refineries one in Palioch and other in Bentiu the first priority.

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    • 22 January 2012 09:42, by jong jong dog

      Mr.Padiet, it is a good idea to have an alternative pipe line but economically and security wise need a proper study, waiting all that time and our urgency for money to develop this newly born nation is the question. Let us walk in the air (i mean to do the impossible) that is export oil through Sudan for a while.

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  • 22 January 2012 09:52, by wad balad

    All this noise for oil that is goin to run out in 10 years time. And what would be a "fair deal"? $1 per barell?
    There should be no more negotiations on this oil issue with these Splm idiots. $36 per barel. If u accept then send that cowboy to khartom to sign the papers otherwise dont make too much noise.

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  • 22 January 2012 10:32, by Alfredo christiani

    Dear wad balad
    Can you tell us your true color or maybe you are ARAB slave ,it seem you never fought for this land that’s why you supported ,the most world wanted criminal Omer Hassan El basher.
    Please wad balad distance yourself away from our affairs or otherwise your neck will be cut
    No Thanks to guys who are against S- SUDAN

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  • 22 January 2012 11:16, by wad balad

    Im from Sudan thats all u need to know. Your oil runing thru our land and pipelines is our affair too. If u want me to distance myself then find urself another route.

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  • 22 January 2012 12:29, by James Maker Akok

    No more North Sudan pipeline, let South Sudan build Oil pipeline to Kenya. North Sudan is broke South Sudan, and North Sudan going to do very big bad things if South Sudan still going to use North Sudan pipeline.

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  • 22 January 2012 14:13, by jong jong dog

    please we are just disturbing ourselves for nothing, those politicians are not reliable. They say diffident thing above the table and a different thing under the table,don’t believe them.Juba said they have paid Khartoum and Khartoum denied and now they are negotiating transit fees.Khartoum said they have prevented oil export but ships are sailing with SS oil. what all these means.

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    • 22 January 2012 16:18, by Dinka Dominated SPLA/M

      Who the devil are you?
      When did you joint this furm?
      Why is your mother name JONG, your Father name JONG and your name DOG?
      I am doubt you are from South, because
      You don’t talk like South.
      You don’t act like South
      You don’t sound like Southernse.
      Don’t peratend man. you are not form Us.
      JONG, what is good about JONG DOG.
      What aparthice names,

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      • 22 January 2012 21:10, by jong jong dog

        Mr.Dinka dominated spla, i apologize if my comments are not good. i know jong in dinka means dog but dogs are lovely animal i like them. my language is mild i know that but i love moderate things and always like people to be in peace.iam true southerner.

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  • 22 January 2012 17:47, by alhassani

    Brothers southerners we were one nation before only one year. We agree that there were many injustices had been done to you and also you should agree that some of you had been serving an outsiders’ agenda, who don’t want this great Sudan to take it’s suitable role as an effective country in the world.But,let us not cry over the spilled milk and begin a new relation with mutual respect.

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    • 22 January 2012 19:18, by Logic

      Alhassani

      You’re a good example of a decent northerner, because you accept that the Old Sudan’s various elite oppressed the South, West and non Arab northern Sudanese.

      But you should also refrain from the propaganda that the South bows to outside agendas anymore than Salah Gosh (NCP) does, the superpowers will penetrate any country from any region if given the chance.

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    • 22 January 2012 19:26, by Logic

      Am sure you’ve noticed the usual racist northerners who abuse south Sudanese daily as if north Sudanese (Arabs) are superior. You should perhaps try to convince them first of attempting to turn over a new page and am sure south Sudanese would respond in kind. Accept the ills of the Arab elite of old Sudan without pointing the finger at outsiders.

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  • 22 January 2012 19:33, by Anynya One

    Message to Jalaby: This is our moment! the Change we believed! We are the Boss! an absolute self-determination! This is one of the reasons why the "South Sudanese" Voted 98% for Independence. Long live Peace! We will Never give up our rights again, nor will we ever tolerate Arab goofy thoughts again. No more goofy gambling! Peace again

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  • 22 January 2012 20:17, by Anynya One

    Remember this Jalaby.. I think you knew it, start from deep down where your motive originated from. Check out with Mohamed Ali’s motives, now go back-ward & start your lessons from before (Nubian) Pyramids. Look, do your research right from there to master thieves’ era till Mohamed Ali. You will know your time has come to an end.

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  • 22 January 2012 21:38, by Kim Deng

    Salva Kiir,

    This will be a good move from your gov’t if you & your inner circle w’ll surviv at least for 12 mns without this oil.

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  • 22 January 2012 22:37, by Nguetbuny de Luelpiny

    Removing Khartoum Regime by force will be the solution of all. African stability,settler should not have cm in Africa Land. Short minded south leaders are giving ArabianPrussian chance in Africa soil. Arab devil Ideology in Africa. African leaders are easily bribe like Idris Deby of Chad.

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  • 7 May 2013 16:29, by dennishobson

    Y7dIxWQYK5thmLxD6oQJO6uiViBlxassanyong actyon madeira plastica plastic lumber When I originally commented I clicked the -Notify me when new comments are added- checkbox and now each time a comment is added I get four emails with the same comment. I

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