Oil Brings New Friction to Sudan and South Sudan
By Jared Ferrie
JUBA, Feb 18, 2012 (IPS) - As Sudan and South Sudan meet for the latest
round of negotiations featuring oil as a key issue this week, four ships
loaded by Khartoum with southern crude are carrying their disputed cargoes
to unknown buyers.
Sudan last month began loading southern crude onto ships it controlled,
saying it was taking what it was owed in transport fees from South Sudan in
kind. The move prompted South Sudan to shut down all
<
http://www.ips.org/africa/2012/02/oil-brings-new-friction-to-sudan-and-sout
h-sudan/%22http:/www.ips.org/africa/2011/10/sudan-china-could-oil-the-peace-
process/%22> oil production, which ground to a halt on Jan 28.
Economic analysts have said that the shutdown would have a huge economic
impact on the new country as oil contributes to 98 percent of its revenue.
The threat of possible
<
http://www.ips.org/africa/2012/02/oil-brings-new-friction-to-sudan-and-sout
h-sudan/%22http:/www.ips.org/africa/2011/10/south-sudan-oil-conflict-threate
ns-to-break-out/%22> hostilities with Sudan over oil would also impact on
the country's current high level of food security. This month the
<
http://www.ips.org/africa/2012/02/oil-brings-new-friction-to-sudan-and-sout
h-sudan/%22http:/www.fao.org/%22> Food and Agriculture Organization of the
United Nations and the
<
http://www.ips.org/africa/2012/02/oil-brings-new-friction-to-sudan-and-sout
h-sudan/%22http:/www.wfp.org/%22> World Food Programme warned that millions
in South Sudan face hunger this year as the level of food insecurity has
risen sharply from 3.3 million to 4.7 million.
When the south separated from Sudan it took with it about 75 percent of
Sudan's oil reserves. But the landlocked country is dependent on Sudan's
transport, processing and export infrastructure to get its crude to market.
Sudan has demanded 32 dollars a barrel, which includes charges to use
facilities as well as a transit fee to cross its territory. South Sudan has
offered a maximum of one dollar per barrel in transit fees, and says it is
already paying the other fees to companies that own the infrastructure.
Officials from both countries are meeting this week in Addis Ababa, the
Ethiopian capital, to discuss issues outstanding since South Sudan declared
independence Jul. 9.
Discussions will include disputed sections of the border and the region of
Abyei, as well as fees that landlocked South Sudan will pay to transport its
oil through a pipeline across Sudan.
Letters from oil companies provided by the office of Pagan Amum, South
Sudan's chief negotiator, identify four ships that were loaded last month
with a total of 2.6 million barrels. Letters identifying the Al Nouf and Sea
Sky were given to reporters in Addis Ababa, the Ethiopian capital, on
January 17. Letters naming the ETC Isis and Ratna Sharada were provided to
IPS's reporter in Juba on Feb. 10.
According to letters by the Petrodar Operating Company (PDOC), its employees
were forced last month to load three ships with southern crude - the Sea
Sky, the Al Nouf and the ETC Isis. In a Jan 19 letter, the Greater Nile
Petroleum Operating Company (GNOPC) president Zhang Pinxian informed
partners that Sudan ordered the loading of 600,000 barrels onto the Ratna
Sharada by copying a letter of instruction it received from the government.
In a letter the same day, South Sudan's Oil Minister Stephen Dhieu Dau
ordered GNOPC to provide all information related to the Ratna Sharada,
"including with respect to its destinations, as well as who chartered the
vessel and who will be purchasing" the crude.
In a Jan. 30 letter to officials from both countries' oil ministries,
Petrodar president Liu Yingcai noted the company's "disagreement and protest
against this unilateral action", referring to Sudan's order to load 600,000
barrels of crude belonging to the Republic of South Sudan (RSS) onto the ETC
Isis.
"This action is certainly not acceptable as the crude belongs to RSS
government and prior approval from RSS is therefore needed," Yingcai wrote.
In a Jan. 14 letter, Yingcai said Khartoum sent security forces to oversee
the loading of 650,000 barrels onto the Sea Sky.
"Our PDOC staff in Marine Terminal had been threatened to be physically
removed if they do not comply with the loading activities," he wrote.
Petrodar was ordered to load 750,000 barrels onto the Al Nouf, according to
a Jan. 16 letter.
Information regarding the destinations or purchasers of the four cargoes has
not yet been made officially public.
South Sudan's oil minister has said his government has a team investigating
and preparing legal cases against parties involved in transporting and
trading stolen oil.
"Any company involved in shipping, trading, or buying this disputed crude
needs to publicly clarify the nature of their involvement, who and how much
they've paid, and where the oil is going," said Dana Wilkins of Global
Witness, a natural resources watchdog group.
One ship, the Al Nouf, is pictured on the website of FAL Oil, an oil trading
company based in Sharjah, United Arab Emirates, in a photo gallery entitled
"Our Ships". Calls to FAL Oil were not answered.
Petrodar said in an emailed response to questions that the company has no
knowledge of the destinations of the three ships it was forced to load with
southern crude, or who the buyers are.
Calls to GNPOC's headquarters in Khartoum were not answered and the company
did not respond to emailed questions. South Sudan's oil minister did not
reply to emailed requests for comment.
(END/2012)
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Received on Fri Feb 17 2012 - 18:48:06 EST
