S.Sudan plans to shut oil production within 2 weeks
Fri Jan 20, 2012 6:09pm GMT
(Adds quotes from news conference, background)
By Hereward and Holland
JUBA Jan 20 (Reuters) - South Sudan said on Friday it was working out a plan
to shut down oil production within two weeks after Sudan said it had started
seizing southern oil to compensate for what it said were unpaid transit
fees.
South Sudan seceded last July under a 2005 peace deal that ended decades of
civil war between north and south, but the two have remained at loggerheads
over oil, the disputed Abyei region and even the location of the border.
The two are locked in a row over sharing oil revenues after South Sudan took
two-thirds of output when it became independent. Oil is the lifeline of both
economies.
The landlocked new African nation needs to use a northern pipeline and the
port of Port Sudan to export the crude but has failed to reach an agreement
with Khartoum over a transit fee, prompting Sudan to seize part of its oil
as compensation.
"The ministry of petroleum and mining will sit down to start a technical
process that will lead to a decision that will lead to a complete shutdown.
That will be in a week or two weeks," government spokesman Barnaba Marial
Benjamin told Reuters.
"We have taken this decision because South Sudan is not benefiting from oil.
It is being taken by force by the Republic of Sudan, and the oil that is
going through the pipeline is being looted," he said.
He said Sudan had seized oil worth $350 million in Port Sudan and preventing
the sale of oil worth more than $400 million by restricting vessels from
entering or leaving the port.
South Sudan's oil minister Stephen Dhieu Dau said the government could run
without oil, which make up 98 percent of state revenues, for 18 months.
Khartoum has said Sudan is seizing some oil and diverting some of it to its
two refineries but has not said whether it would try selling any seized oil.
Sudan is demanding $1 billion for unpaid transit fees since July plus $36 a
barrel in the future as a transit fee, roughly a third of the export value
of southern oil. Khartoum also wants Juba to share Sudan's external debt of
$38 billion.
South Sudan pumps around 350,000 bpd, officials have said. Sudan produces
115,000 bpd in its remaining fields but needs it for domestic consumption.
Dhieu Dau said the government wanted to push ahead with plans to build an
alternative pipeline to end dependency on northern export facilities.
"We are planning that building an alternative pipeline will be a national
duty for all South Sudanese and the plans which are now being designed by
the ministry of petroleum and mining," he told reporters, without
elaborating.
South Sudan has held talks with foreign firms to build a pipeline to Kenya
but oil industry insiders are sceptical because it would have to cross
through rough and violent terrain.
In addition, oil production is going to halve within a decade without
significant new finds, according to the International Monetary Funds (IMF).
South Sudan hopes to find oil in Jonglei state where France's Total holds a
largely unexplored oil licence but tribal has escalated in past weeks.
Sudan's government itself is under pressure to overcome a severe economic
crisis after losing the southern oil, which made up 90 percent of the
country's exports. It generated $5 billion in oil revenues in 2010.
Juba has offered Sudan the sale of discounted oil and other financial help,
but neither side shows sign of shifting their positions. (Reporting by
Hereward Holland; Writing by Ulf Laessing, editing by Jane Baird and Jason
Neely)
KHARTOUM Jan 19 (Reuters) - Sudan's army has clashed with rebels in Blue
Nile state, which borders South Sudan and where fighting has been going on
for five months, but the army denied on Thursday that rebels had shot down a
helicopter.
Clashes spread to Blue Nile in September after violence broke out in June in
the oil-producing state of South Kordofan between the army and rebels from
the northern wing of the Sudan People's Liberation Movement, which wants to
topple the Khartoum government.
Khartoum wants to explore oil in Blue Nile which is also rich in minerals.
The fighting has already forced about 417,000 people to flee their homes,
more than 80,000 of them to newly independent South Sudan, according to the
United Nations.
SPLM-North rebels said in a statement that clashes broke out in the area of
But on Wednesday in southern Blue Nile during which 26 soldiers were killed.
It said rebels had shot down an army helicopter and destroyed five military
vehicles.
Army spokesman Sawarmi Khalid Saad said seven rebels had been killed and six
soldiers wounded during fighting in the area. "The army was clearing the
areas of rebels," he said, denying that a helicopter had been shot down.
Blue Nile and South Kordofan contain large groups who sided with the south
in a decades-long civil war, and who say they continue to face persecution
inside Sudan since South Sudan seceded in July.
The SPLM is now the ruling party in the independent south and denies
supporting SPLM-North rebels across the border.
Events in South Kordofan and Blue Nile are difficult to verify because aid
groups and foreign journalists are banned from areas where fighting takes
place.
SPLM-North is one of a number of rebel movements in underdeveloped border
areas who say they are fighting to overthrow Sudan's President Omar Hassan
al-Bashir and end what they see as the dominance of the Khartoum political
elite.
Sudan and South Sudan, who still have to resolve a range of issues including
the sharing of oil revenues, regularly trade accusations of supporting
insurgencies on each other's territory. (Reporting by Khalid Abdelaziz;
Writing by Ulf Laessing)
C Thomson Reuters 2012 All rights reserved
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Received on Fri Jan 20 2012 - 17:15:31 EST
