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South Sudan says oil shutdown is in breach of cooperation agreement

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July 23, 2013 (JUBA) - South Sudan warned on Tuesday that the Sudanese government’s decision to halt the flow of crude oil was “unjustifiable and a “material breach” of the September 2012 deal signed between the two countries.

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South Sudan’s oil minister, Stephen Dhieu Dau, speaks during a press conference in the capital, Juba, on 23 July 2013 (Photo: Larco Lomayat)

Speaking at a news conference on Tuesday, the country’s petroleum and mining Minister, Stephen Dhieu Dau, said Khartoum was determined to proceed with the oil shutdown, describing the decision as “very unfortunate”.

“This unilateral decision by the government of Sudan to stop the flow of the oil to the international markets is unjustifiable and it will affect the oil investment climate, Dau told journalists.

He explained that he received a letter dated 9 June by the Sudanese government, notifying his administration about its decision to stop receiving, processing and transporting crude oil produced from South Sudan within 60 days of receipt of the letter.

“They sent us a letter on 9 June which we responded on 11 June 11 stating that the decision to suspend the oil agreement between the two countries and shutting down of the processing and transportation facilities is a material breach of the oil agreement. According to the oil agreement, suspension can only happen for reasons that are technical or economically non sustainable. So this decision is unjustifiable”, said Dau.

He said that despite assurances of his country’s “unwavering commitment” to fully implement the cooperation agreement and all of its constituent agreements “in good faith”, including mechanisms for implementation, monitoring, evaluation and dispute resolution, Sudan still refused to accept calls for dialogue even after the high level delegation led by vice-president Riek Machar visited Khartoum on 30 June.

“Instead, the government of Sudan on 7 July wrote yet another letter, this time to the companies operating the processing and transportation facilities in Sudan reminding them that the full shut down for oil produced from the territory of the Republic of South Sudan is to be completed on 7 August. This has left us with limited options on how to find a lasting solution to the issue”, Dau explained journalists at the news conference.

He said the circumstances had forced his ministry on 21 July to instruct all oil companies operating in the country to shut down the production of crude oil in sufficient time so as to avoid any environmental hazard to either of the two nations.

Meanwhile, a letter written by the ministry of foreign affairs and international cooperation, asking for a reversal of the decision, had also proven unsuccessful, Dau said.

The minister also warned that Sudan’s decision to block the flow of South Sudan’s crude oil to the international markets through its territory would have negative economic consequences for both countries.

The two Sudans have so far failed to resolve most of the contentious post-secession issues that have thwarted stability in the region since the South won its independence in July 2011, taking with it the majority of the once united territory’s oil wealth.

REDUCTION IN PROGRESS

Dau revealed at the news conference that his ministry had on 16 July started reducing production from 200,000 barrels a day to 120,000 barrels a day after receiving notification from the Sudanese government.

“The reduction is now in progress in block 3 and 7 in Upper Nile state, which has the highest number of wells. Block 1, 2 and 4 and block 5A are not very critical and may start closing down by 25 July 25. This block has only eight wells running. Block 1, 2 and 4 has 100 wells running”, said Dau.

He also pointed out that closing down oil wells during the rainy season is more difficult as it involves heavy trucks used for flushing the flow lines and water tanks, which can be difficult to manoeuvre on the region’s muddy roads.

He said the crude oil which his country had produced and sold in June includes 1 million barrels of oil, while an additional 2.2 million barrels of oil produced so far in July have also been sold.

Another 3.2 million barrels projected for production and sale in August would not be affected by the shutdown because the line fill would be sufficient to cover sales.

(ST)

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  • 24 July 2013 04:54, by Dinkawarrior

    We don’t care about the Oil shutdown, let Khartoum know that time has come.

    repondre message

    • 24 July 2013 07:01, by Matem Ngor Matem

      Many thanks to the government of South Sudan for concretes initiatives for transformations of this Country, now let our oil flow like a water while the we are heading to the right direction of our beloved Country of South Sudan.
      Long live South Sudan
      Long live SPLM/SPLA.

      repondre message

  • 24 July 2013 06:04, by SPLM- DC Hardliner

    the colours of real kiir has now been revealed. he can now be compared to CAR former leader Babel Bakosa and ugandan Amin. my fears is that, this country will surely disintergrate.

    repondre message

  • 24 July 2013 06:05, by SPLM- DC Hardliner

    the colours of real kiir has now been revealed. he can now be compared to CAR former leader Babel Bakosa and ugandan Amin. my fears is that, this country will surely disintergrate.

    repondre message

  • 24 July 2013 06:08, by SPLM- DC Hardliner

    the colours of real kiir has now been revealed. he can now be compared to CAR former leader Babel Bakosa and ugandan Amin. my fears is that, this country will surely disintergrate.

    repondre message

  • 24 July 2013 08:05, by Gabriel Ajak

    It is good for the oil pipeline of South to be shutdown by the North,but also it is good for the north trades to be deported back to the country belonging to by the South.

    repondre message

  • 24 July 2013 10:23, by good luck

    what we needed here in south sudan is a good government to people such that everyone knowed his/her way to be follow not jumping from zero level to offical.

    repondre message

  • 24 July 2013 10:55, by Jalaby

    Now you’re crying?
    You guys are idiot, stupid dumb and fully close-minded, stop .. stop .. stop supporting Sudan rebels, stop providing safe haven to them, every pullet or rocket that fires against Kadugly city is coming from the south, Um Rawaba & Abo Karshola attack was initiated, planned and fully supported by the south SPLA army, all the injured rebels were

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    • 24 July 2013 10:59, by Jalaby

      evacuated to the south and given the medical treatment in south hospitals, Al-Hilo & Aggar are based and direct their military operation from Juba and SPLA-N still get their salaries from the south!
      Just lift your hand from Sudan rebel and stop undermining Sudan national security and no one will stop your damn oil to reach Port Sudan, don’t you understand idiot?!

      repondre message

      • 24 July 2013 15:24, by Kalo

        Stupid jalaby,you are lair,forget about the case of alHilo and Agar,we are now in Sadira/jebel dira,soon in Khartoum where we will capture you alive
        wad-Nuba

        repondre message

    • 24 July 2013 19:04, by Hardball

      Jalaby, you’re the one who is an idiot; because you don’t know the different between an independent country and a state within your country. South Sudan is not a state within your country to be told what to do and what not to do idiot! You shut down the pipeline right? Then stay in your home and shut up! South Sudan had important things to do here.

      repondre message

  • 24 July 2013 12:24, by Pif Paf

    S.Sudan breached the cooperation agreement first by supporting the rebels and as a result the oil was shutdown. Does SPLM think it can out smart Sudan by supporting the rebels while Sudan allows the oil to flow? Never !!
    The ball is in S.Sudan court. SRF or Cooperation agreement ??

    repondre message

  • 24 July 2013 15:11, by Angelo Achuil

    Is there not one thing that South Sudan have, something passing in our soil, something we have control over to use as a bargaining chip with the North? I don’t think oil shutdown will stop there. It will automatically affect Abyei referendum and many other things. Oil shutdown is a distraction strategy against other big plans in the South.

    repondre message

  • 24 July 2013 17:39, by Lion

    South Sudan former Information Minister Barnaba Marial first interview after getting fired.......Watch
    http://www.southsudanhub.com/media/2731/S_Sudan_former_Info._Minister_Barnaba_Marial_Benjamin/

    repondre message

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