* Exports halted until a deal on transit fees -minister
* International firms allowed to keep exporting their shares
* Oil is the lifeblood of both countries' economies (Adds analyst comment)
By Alexander Dziadosz and Hereward Holland
KHARTOUM/JUBA, Nov 28 (Reuters) - Sudan said on Monday it had halted
landlocked South Sudan's oil exports until the two agree on a transit fee,
stepping up a row between the former civil war foes over how to untangle
their once-integrated oil industries.
South Sudan seceded on July 9, taking about three-quarters of the formerly
united country's roughly 500,000 barrels per day (bpd) of oil production -
the lifeblood of both economies.
The new nation still relies on a pipeline running north through Sudan to a
Red Sea port to export crude, but the two sides have not agreed how much
South Sudan should pay to send its oil through Sudan.
Officials decided to stop the government of South Sudan's oil exports -
roughly 200,000 bpd - on Nov. 17, Ali Ahmed Osman, Sudan's acting oil
minister, told reporters, adding the pipeline was still running and
international firms would not be affected.
"We stopped exportation of the southern oil. We gave them four months free,
without any sort of agreement," he said, adding Sudan would not resume the
exports until the two sides reached an agreement over the transit fee.
South Sudan has been selling about 200,000 bpd of oil since it declared
independence, according to figures provided by the country's petroleum
ministry last week.
Elizabeth James Bol, South Sudan's deputy oil minister, sharply criticised
Sudan's move. "We consider it a sign of irresponsible and abusive anger
which does not show any sense of leadership in the government of Sudan," she
"I assure highly that we will protect the sovereignty of South Sudan and we
will have complete national ownership of the oil sector in South Sudan."
Sudan had been allowing South Sudan to continue exporting crude without a
final agreement on the expectation that the fees would be paid after a deal.
Osman said South Sudan already owed Sudan some $727 million in arrears for
the period between July 9 and the end of October.
Sudan previously blocked a shipment of South Sudan's oil in August, and said
it was asking for a transit fee of $32 per barrel. South Sudan rejects the
figure as too high.
Before South Sudan seceded, the two governments split revenues from southern
oil roughly 50-50.
Violence along the vaguely-defined border has already stoked tensions, with
both accusing the other of backing rebel groups on either side of the
Sudan's move to block South Sudan's exports was likely to further complicate
sensitive talks over a raft of unresolved issues such as debt and pensions
being discussed in the Ethiopian capital Addis Ababa.
"Best case scenario: it will prompt the negotiating teams to agree to a new
oil deal quickly," said Dana Wilkins from Global Witness, which has done
extensive research on South Sudan's oil economy.
"Worst case: the negotiations devolve into traded threats and actions that
harm both countries and exacerbate tensions and border instability even
Osman said international companies would be allowed to continue exporting
their shares of oil normally, because only shares belonging to South Sudan's
government would be blocked.
"We're not going to shut the pipeline, we're not going to shut any well,
we're not going to stop any company, because we have an agreement with the
companies. The share of the companies will be exported," he said.
But a South Sudan oil official said a 600,000 barrel oil shipment sold by
South Sudan to China's Unipec did not load as scheduled on Monday because of
Sudan's decision to halt South Sudan's oil exports.
A 1 million barrel oil shipment sold to trading house Vitol is due to load
on Tuesday but will not "unless there is a change of mind today," Macar
Aciek Ader, undersecretary at South Sudan's ministry of petroleum and
mining, told Reuters.
"We were supposed to load 600,000 barrels today, but it didn't load," he
said by telephone, adding the buyer was Unipec, trading arm of China's top
refiner Sinopec Corp.
Documents provided by the ministry to reporters later confirmed the buyers
and quantities of oil. Vitol's shipment was Dar Blend and Unipec's was Nile
Blend, the documents showed.
Oil accounts for some 98 percent of South Sudan's government revenues.
South Sudan has repeatedly threatened to build an alternative pipeline to
export its crude, but analysts say this has little prospect of becoming
viable soon because it requires fresh oil finds and an end to unrest in
South Sudan split off into the world's newest country after voting
overwhelmingly for independence in a January referendum promised in a 2005
peace deal that ended decades of civil war with the north.
Oil was one of the factors behind the conflict, which killed an estimated 2
million people. (Editing by William Hardy)
LONDON Nov 28 (Reuters) - Britain will seek to build consensus on measures
to tackle instability and piracy in Somalia, such as improved humanitarian
aid and economic support, when it hosts a major international conference
The meeting, to be hosted by Prime Minister David Cameron, will be held on
Feb. 23 in London, Foreign Secretary William Hague said on Monday.
"Now is the time, we believe, to seek intensified international action on
Somalia," Hague told parliament. "That country is a scene of great human
suffering, but is also a base of piracy and terrorism, which exacerbate the
country's plight and threaten our own security."
A fleet of foreign naval vessels patrols strategic sea lanes off Somalia,
where pirates prey on commercial vessels and private yachts and hold them
Cameron announced last month that British merchant ships sailing off the
coast of Somalia would be able to carry armed guards to ward off pirate
attacks, bringing it into line with many other countries.
The prime minister has described the east African nation as a "failed state
that directly threatens British interests," citing attacks on tourists and
aid workers, and radicalisation of young Britons by militant Islamists with
roots in the region.
Hague told parliament on Monday that tens of thousands of Somalis had died
in recent months, while a million were internally displaced and faced the
world's worst humanitarian crisis.
He called for a wide-ranging approach to undermine al Shabaab rebels and
tackle piracy, coupled with economic support, humanitarian aid and
assistance to the African Union mission in Somalia, AMISOM.
"The aim of our conference in London in February will be to build agreement
on such a reinforced international approach," he said.
The high-level conference is expected to gather regional players, as well as
representatives from the United States and other countries, a government
Somalia was formed in 1960 from a former British protectorate and an Italian
colony. It descended into chaos after the 1991 fall of dictator Mohammed
Siad Barre. The government of President Sheikh Sharif Ahmed holds sway in
the capital Mogadishu, but al Qaeda-linked al Shabaab rebels control much of
the rest of the country. (Reporting by Adrian Croft and Tim Castle; Editing
by Alessandra Rizzo)
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Received on Mon Nov 28 2011 - 17:24:15 EST