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South Sudan shuts down its oil production countrywide

January 20, 2012 (JUBA) – The government of the Republic of South Sudan has decided to shut down all its oil production throughout the country in response to the action by Khartoum, which confiscated the oil as it flows through North Sudan pipelines.

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A Southern Sudanese soldier (R) stands next to crude oil reservoir tanks while a foreign Greater Nile Petroleum Operating Company (NPOC) oil worker walks by at a field processing facility in Unity State on November 10, 2010. (Getty)

The resolution was passed today in the Council of Ministers meeting chaired by President Salva Kiir Mayardit. The Minister of Petroleum and Mining, Stephen Dhiew, was directed by the Council to immediately workout the technicalities of shutting down the new country’s oil operations.

South Sudan said it has already lost hundreds of millions of dollars as Khartoum took over 3 million barrels of oil that passed through the pipeline to Port Sudan. Khartoum claimed that it confiscated the oil because of unpaid fees.

However, Juba denied the claim as baseless, saying it has been paying all the fees since independence as verified by the international oil companies operating in South Sudan and therefore it was an act of aggression by the later to loot the property of an independent nation.

Officials say the process of completely shutting down all the oil wells may take a week.

The government of South Sudan has already notified the oil companies about the decision to shut down the oil operations in the country.

Meanwhile South Sudan will look for alternative routes of pipelines to other neighbouring countries and refineries unless Khartoum reaches a future agreement with South Sudan.

Oil constitutes 98% of revenues in South Sudan, but officials say it is better keep it under the ground and sell it in the future, instead allowing Khartoum to steal it from them.

It is not clear how Khartoum will react to this serious development but the move will adversely affect the economies of both countries due to their near-total dependence on oil.

The minister of information and official spokesperson of the government, Barnaba Marial Benjamin, told journalists after the cabinet meeting that the behaviour of Khartoum led to South Sudan’s shut down.

He also said the environmental impact as a result of the shutdown would be taken care of by South Sudan’s ministry of petroleum in the South.

(ST)