From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Tue Mar 23 2010 - 16:36:57 EST
Independent south Sudan "could keep old currency"
Tue Mar 23, 2010 7:21pm GMT
JUBA, Sudan, March 23 (Reuters) - South Sudan could keep using the national
Sudanese currency for up to a year after a looming referendum on
independence if its people vote "yes", the head of the region's central bank
said on Tuesday.
Southerners are widely expected to vote to split away from Sudan's north in
the referendum, due to take place in January 2011 under a peace deal that
ended more than two decades of north-south civil war.
The governor of the Bank of South Sudan Elijah Malong told Reuters officials
were still deciding what to do with the currency of the oil-producing region
after the vote.
Asked to name the most viable option, he said: "If it is a peaceful
separation of the south from the north there will be no reason why we would
not use the present currency until further notice ... say six months or a
year."
Senior northern and southern officials have been holding faltering talks on
"post-referendum" issues, including the management of oil reserves. Most of
Sudan's oil lies in the south but the only pipeline passes through the
north.
Any agreement on the continued use of the Sudanese pound south of the border
would mean "the southern economy will still be tied to the national
economy", said Malong.
He said two other options on the table were the quick creation of a new
currency or temporary use of the U.S. dollar.
"(One option) would be to use dollars for the time being if people decide
not to use Sudanese pounds as soon as there is independence. Then there
would be a dollarisation of the economy," he said.
Malong declined to comment on the current state of the reserves of the Bank
of South Sudan. "I will not tell you that. It is not your problem."
But he said they would not be an obstacle to the creation of a new currency.
"We are not an economy ... like the British economy that has been there for
millions of years. We are an economy that has started with oil money so if
we save oil for three months we will have a lot of reserves," he said.
"We are potentially capable of producing a new currency within six months,"
the governor added.
South Sudan's currently semi-autonomous government gets up to 98 per cent of
its revenues from its share of Sudan's oil wealth, set out in the 2005
Comprehensive Peace Agreement.
Analysts have warned there is a risk of a return to conflict after the vote.
Distrust between the sides remains deep and parts of their shared border
have not been agreed.
The north-south civil war killed an estimated 2 million people and forced 4
million to flee their homes. (Reporting by Ed Cropley and Skye Wheeler;
editing by Andrew Heavens)
C Thomson Reuters 2010 All rights reserved
INTERVIEW-South Sudan aims to overhaul foreign oil deals
Tue Mar 23, 2010 12:43pm GMT
* South worried about foreign profits, environment
* Wants fresh terms with Chinese, Malaysian, Indian firms
By Skye Wheeler and Ed Cropley
JUBA, Sudan, March 23 (Reuters) - An independent southern Sudan would review
deals struck between Khartoum and foreign oil firms amid concerns about
excessive profits and environmental damage, a senior southern minister said
on Tuesday.
"These are contracts that were signed during the war," Presidential Affairs
minister Luka Biong Deng told Reuters in his prefabricated offices in the
southern region's scruffy capital. "We have to look into these contracts."
China National Petroleum Corporation (CNPC), Malaysia's Petronas [PETR.UL]
and India's Oil and Natural Gas Corp (ONGC.BO:
<http://af.reuters.com/stocks/quote?symbol=ONGC.BO> Quote) are the main
outside oil firms in Africa's largest country and third biggest producer of
oil.
Even though most of the oil lies in the southern third of the country, most
of the deals were struck with the northern government during the 24-year
north-south civil war that ended in 2005 after the death of as many as 2
million people.
The Comprehensive Peace Agreement (CPA) struck in 2005 provides for a 50:50
split between north and south in government revenues generated from oil in
the south. The only pipeline out of the country is via the north.
However, the settlement is only temporary since, under the CPA, the south is
due to vote on secession in January - and most indicators are that it will
become Africa's newest nation state.
Even though Juba's semi-autonomous government has made clear it will respect
existing contracts, Biong said it was concerned about environmental damage
and also the high profits deriving from contracts negotiated when oil was a
fraction of the $80 a barrel it now commands.
"They have really, really got a huge profit out of these contracts. It is in
the interests of the south to review these contracts -- leave alone the
issue of the environment," he said.
He also accused the firms of paying little attention to the needs of the
communities around the wells, which mostly lie in the northern portion of
what would become an independent Southern Sudan.
"They are using the contracts that they have now with the mindset 'Get out
as much as you can' and you can talk about it later on," he said.
"It depends on the way we are going to review these contracts. If these do
not meet our minimum requirements, we definitely have to ask some of these
companies to give way for newcomers. This cleansing of the whole sector is
critical," he said.
France's Total SA (TOTF.PA:
<http://af.reuters.com/stocks/quote?symbol=TOTF.PA> Quote), which holds a
vast undeveloped exploration concession in the far south, would be welcome
to begin long-delayed operations, Biong said.
U.S. firms barred from trading with Sudan due to sanctions imposed by
Washington on Khartoum would also be gladly accepted, he said.
With the south relying on oil for 98 percent of its revenue, any
interruption to supply while contracts are renegotiated would hit it hard in
the pocket.
"We don't want to send a wrong signal that we are going to cancel all the
contracts but we are going to engage with them logically and in an informed
way," Biong said.
(Editing by Andrew Heavens)
C Thomson Reuters 2010 All rights reserved
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