Home | News    Wednesday 20 January 2016

Khartoum preparing for South Sudan’s possible oil shut down, says official

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January 19 2016 (KHARTOUM) – The Sudanese government has undertaken technical measures in preparation of a possible oil production shutdown by the South Sudan, the country’s finance minister said Tuesday.

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Sudanese finance minister Badr al-Din Mahmoud

Speaking to Sudanese law makers, the Minister of Finance, Badr al-Din Mahmoud said that Juba has failed to pay the oil transit fees, and consequently his government was forced to take its share in kind, according to a Cooperation Agreement signed between the two countries.

In August 2013, South Sudan agreed to pay to Khartoum $9.10 for the oil produced in Upper Nile state and $11 for that of Unity state which produces some 20% of South Sudan’s oil. Also Juba agreed to pay the Transitional Financial Assistance (TFA) to the average of the agreed oil transportation fees.

Mahmoud, however, said besides the oil transportation fees ($9.10 for the oil produced in the Upper Nile or $11 for the oil of Unity state) the fees ($ 25) meant to the repayment of a $3 billion compensatory package that Juba agreed to pay Khartoum.

He further said the two countries didn’t discuss the rescheduling of the three billion package, which is supposed to be paid within three years as provided in the Cooperation Agreement.

"If they are not able to implement it then we can talk about increasing the time period, but this should be done within the framework of the implementation of all other agreements," the minister further said.

Also, Mahmoud pointed that Juba has only implemented the oil agreement, and ignored the other protocols in the Cooperation Agreement because they have an interest in the oil money.

The Sudanese minister revealed that his government has carried technical and administrative arrangements, in anticipation of the shutdown of the oil production and to reduce the potential impact on the pipelines.

The Government of South Sudan had earlier asked Khartoum to cut the lease of Sudanese oil transportation facilities, arguing that its request was prompted by the current fall in oil prices on the international market.

Last week, South Sudan’s Petroleum and Mining ministry said it may be forced to shut down its oil fields in Upper Nile state and turn off pipeline, should the Sudanese government a request to lower its oil transit fees.

“We are left with no option at the moment rather than to shut it down because it’s not feasible. We cannot sell the oil at loss”, the ministry said in a memo sent to Sudan’s Ministry of Petroleum and Mining.

Juba’s letter requesting the Sudanese Petroleum and Mining Ministry to reconsider its transit fees comes in the wake of changes in global oil prices.

The price of crude oil is currently at $29 dollars per barrel in the international market.

Presently, South Sudan is producing oil at 160,000 barrels per day, despite a decline in its oil production due to the violent conflict that engulfed the young nation, killing thousand and displacing nearly two million people.

South Sudan, experts say, now receives less than $5 per barrel when transit charges paid to Sudan are deduced and oil exploration companies are paid.

(ST)

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  • 20 January 2016 09:58, by Khent

    South Sudan should immediately stop the flow of oil through Northern pipelines and build refineries all over the South with the billions of dollars that the death-deserving chimps in Juba have stolen since 2005. Were I Sovereign, I would want to know where all that money is, and I would pull out fingernails [if necessary] to retrieve them.

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    • 20 January 2016 10:40, by Khent

      There should be no links between the North & the South. As long as the North occupies Southern land, it is an enemy State and should be treated as such. I really don’t understand Juba and why it has allowed itself to be so dependent on an enemy State. Juba had years to build an alternative pipeline, but inexplicably squandered that opportunity...

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      • 20 January 2016 10:46, by Khent

        Some have said that the alternative pipelines should go to Djibouti through Ethiopia. I disagree with that. For one, that would require paying transit fees to two countries. And two, I simply don’t trust Djibouti. It’s a Muslim country and a member of the Arab League; in the event that hostilities resume between the two Sudans, what would prevent the Gulf States from using their influence...

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        • 20 January 2016 11:04, by Khent

          ..and money to convince Djibouti to stop the flow of oil. Kenya is the other ’alternative’ that keeps getting mentioned, but Kenya occupies an area [the Ilemi triangle] - an area larger than Lebanon, and so that too should immediately be dismissed. We might have to do something radical and seemingly counter-intuitive, like constructing a pipeline through the DRC...

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          • 20 January 2016 11:33, by Khent

            ..I know what you must all be thinking. Why should we construct a pipeline to the South Atlantic ocean when our customers are all in Asia? Sure, the distance and the travel time would be longer using current container ships... but there are advances in ship building technology that will increase speed by two fold. New ships will also be more efficient and larger.

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    • 20 January 2016 13:25, by Ayuiu Makuac Lam

      South Sudan government is right to disagreed with Khartoum, if $25 is continue meanwhile the barrel is sell at $29 per a barrel.

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      • 20 January 2016 16:31, by Mi diit

        Khent (Rommel),

        You are such a stupid tribal chimp. Who would allow your tribal interest to flourish, by trying to divert the direction of oil pipeline to Bahr el Ghazal region (Dinka region)?

        Djibouti through Ethiopia is more feasible and stable. Economic interests are safeguarded by all those that benefit from it. Don’t worry about Arab politics in Djibouti.

        Kenya is also another option.

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        • 20 January 2016 16:37, by Mi diit

          How stupid economically that you want to build a pipeline from Melut less than 100km from Ethiopia border and instead across the whole country to several thousands kilometers to that playful DRC?

          How will you build pipeline from Eastern Equatoria (LLemi Triangle)7,000km to DRC, instead of 200km to Mombassa?

          Very stupid idea!!!

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          • 20 January 2016 16:55, by Khent

            Mi diit

            Your entirely uninspired accusations and attempts at insult are pitiful, as usual. I used the word chimp and because you’re incapable of original though, you use the same word against me — monkey see, monkey do. LOL! You do realise that an oil pipeline from Melut wouldn’t need to traverse an inch of Bahr el Ghazal, right?

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            • 20 January 2016 17:03, by Khent

              The only pipelines that would need to travel through Bahr el Ghazal are the ones that would be linked with the yet to be exploited oilfields in Bahr el Ghazal’s Block E and oilfields in Unity State. And I sincerely hope that your crack infested micro brain understands that the pipelines would need to travel through Nuer, Dinka and Equatorian territory...

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              • 20 January 2016 17:09, by Khent

                ..so I don’t see how this apparently serves ’tribal interests’, per your shrill accusations. I’d like to entertain your stupidity for a moment. Pray tell, how would a pipeline going through Dinka territory serve their ’tribal interests’? You do realise that it’s not as though the Dinka can somehow demand transit fees from oil that actually originates in their own land?

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                • 20 January 2016 17:17, by Khent

                  Use that worthless, bacterium size, crack infested excuse for a brain for a change and try to *think* over exactly just how pipelines traversing through Dinka territory would serve their ’tribal interests’. I’m bored of this, and I really shouldn’t confer any human level intelligence on a worthless animal, so let me spell it out for you. Pipelines don’t bring jobs, you dolt. It’s not a refinery..

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                  • 20 January 2016 17:38, by Khent

                    ..Job opportunities can’t magically spring up in areas that oil pipelines pass through. Melut is not 100 km from the Ethiopian border, you innumerate wanker. It’s almost 500km. Where have I said that I want to build a pipeline from Ilemi through the DRC? This is your lack of reading comprehension rearing its ugly head, as usual...

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                    • 20 January 2016 18:06, by Khent

                      ..And even if I wanted to, the distance wouldn’t be 7000km. It would be just over 2000km. The distance between an area in Eastern Equatoria like Lokomarinyang to Mombasa would be in excess of 1400km. Where do you get your outlandish figures from, idiot? Do you *think* [that’s where I should end it] that Kenya would EVER return the Ilemi triangle if we economically rely on them?

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                      • 20 January 2016 18:12, by Khent

                        The Ilemi triangle is larger than Lebanon. Should we surrender it to Kenya by becoming too dependent on them in the same fashion that Riek became too dependent on his Arab masters? Are you of the opinion that the lands of Eastern Equatoria should be sacrificed for expediency and economic gain?

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                        • 20 January 2016 18:17, by Khent

                          Djibouti is a Muslim country and a member of the Arab League. It has ties with Arab countries that could threaten our economic interests. Djibouti could probably get $300 million a year from our oil, but the Gulf States could easily dwarf that and we wouldn’t be able to export our oil. You have to calculate every social, political, economic and military variable.

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  • 20 January 2016 10:06, by Thondet Manyang

    Stop it! Khartoum has also refused to open borders, create buffer zones etc. And turns today to benefits using lion share that is unexceptable.

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  • 20 January 2016 10:31, by Kiir

    I agree with Sudanese Minister of Finance not accept to low2er the transit fees, because the money that go to Juba Government goes to individual people and Uganda. Better to stop the production of the oil. Again signed agreement must be respected whether the fuel price has dropped from $100 to $1 or $30.

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  • 20 January 2016 10:37, by Uncle J

    Khartoum can comfortably enjoy using pipelines as a weapons over South Sudan because our South Sudan government is so gay it talks about things it doesn’t implement like few years ago it was deadly serous about constracting alternative pipelines through now it is all dreaming.

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  • 20 January 2016 11:32, by Eastern

    I agree with Khent’s analysis.

    The urgent intervention is to target the regional market with petroleum products by constructing refianries in strategic locations like in Wau are for DR Congo/CAR markets, southeastern part of South Sudan for the East African markets. Local byproducts from the refianries will feed local industries such as agric schemes, etc. This needs leadership for such to happen

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  • 20 January 2016 11:38, by Eastern

    Those in Kiir’s government still want to maintain relationship with Khartoum because of the assets they have in Sudan hoping that in future the outcome of the South Sudan Referandum would be reversed and the two countries would reunit! Sudan is clearly an enemy state hell bent on seeing South Sudan goes to the gutters; shut the diplomatic gate with Khartoum and focus on South Sudan!

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    • 20 January 2016 12:12, by Khent

      Eastern

      I agree with everything that you’ve said. You’re intelligent and a true patriot. People like us must gradually take the State by targeting the centers of power in the country. It will be fraught with danger and it will take time [decades], but it must be done - unless we want to be lorded over by the sons of these incompetent, myopic and ignorant thieves.

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      • 20 January 2016 13:21, by Eastern

        Thanks Khent.

        In fact the youth need be made to begin being able to think outside the box; they youth who have some exposure shouldn’t allow themselves ever be used by people in their evening days of live to ride to power.

        Let’s pull back South Sudan onto the track of peace and progress; yes we can!!

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        • 20 January 2016 16:46, by Khent

          Eastern

          That’s exactly right. If we want to have the kind of country that we can all be proud of, than the youth (us) have to be intelligent, perceptive, visionary, principled, innovative and willing to reject the retrogressive counsel and directives of our ’elders’.

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      • 20 January 2016 16:39, by Mi diit

        Ahahahahahaaaaaaaaa............stupidity is so widespread in South Sudan.

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  • 20 January 2016 15:08, by Eastern

    This really exposes the bankcraptcy in governance and leadership in Juba. There was an agreement South Sudan signed with Sudan in which they are signatures of people currently sitting in the Juba establishment. Why do they want to change the terms they agreed to then without resigning their posts now for misleading the country? We have mascaraders and comedians in Juba for government technocrats!!

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  • 20 January 2016 16:48, by Bentiu Sudan

    The gangs and killers in Juba thought they could play the mind of Sudanese like they are doing to the SPLM-IO. Sudan is match stable government than South Sudan so stop the killing tactic you are using with the rebels. Constructing refineries in S. Sudan is not easy either because there rebels every where in S. Sudan. Go a head Sudan and close the pipeline.

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  • 20 January 2016 18:18, by marie

    It is better for South Sudan to have a better relationship with Sudan than Uganda or Kenya which are dumping expired goods and medicines in the South resulting in daily deaths. Khartoum at least at the population level is sincere compared to all these greedy African countries without a sense of humanity in them. South Sudan currency work in Sudan but not Uganda or Kenya, just think.

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    • 20 January 2016 18:59, by Khent

      marie

      Where are you slavish little cockroaches coming from? The North is not ’sincere’ — it is the opposite. Its occupation of Kafia Kafia [an area also larger than Lebanon] is testament to that. The CPA mandated a return to the 1956 borders, but they have completely rejected this and occupy well over a dozen Southern territories. That’s sincerity in your book, traitor?

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  • 20 January 2016 19:33, by marie

    These are contested areas that needs to be resolved amicably through a process. Remember, Ilemi triangle in Eastern Equatoria is occupied by Kenya. Uganda is also occupying lands in Magwi and yet you consider them as friends. Well people who are knuckle heads call others names while they themselves know their own dementia.

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    • 20 January 2016 20:22, by Khent

      marie

      The vast majority of those areas are not even remotely contestable. The Kafia Kingi enclave is internationally recognized as belonging to South Sudan. We signed the CPA with the North, and they were suppose to return any territory that was part of the South in 1956, but they refused, and you dare speak of ’process’? States have no ’friends’ - only common interests.

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      • 20 January 2016 20:25, by Khent

        The Kafia Kingi enclave was part of Bahr al-Ghazal province when Sudan gained independence in 1956. In 1960 it was transferred to Darfur, which had become a province of Sudan in 1916. (The Kafia Kingi Enclave: People, Politics and History in the North-south Boundary Zone of Western Sudan – Edward Thomas)

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        • 20 January 2016 20:26, by Khent

          At independence Kafia Kingi was part of the south. The area was transferred to northern administration in 1960. Under the terms of the CPA, therefore, it is due to be returned to Southern Sudan, to the administration of Western Bahr el Ghazal state. (The Kafia Kingi Enclave: People, Politics and History in the North-south Boundary Zone of Western Sudan – Edward Thomas)

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  • 20 January 2016 21:51, by marie

    Remember Sudan was one country before South Sudan seceded. The issue of lands always takes a long time, but if people negotiate in good faith, it would be resolved. Leave alone the international border. Just have a look at the mess we have in South Sudan. Communities are dying everybody over land issue and the big guys taking other peoples land at the gunpoint. We should solve these first.

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