South Sudan’s minister says oilfields in Unity State completely shut down

January 26, 2012 (JUBA) – All the oil wells in Unity State of South Sudan have been completely shut down in implementation of the government’s decision to halt oil operations countrywide.

The newly independent Republic of South Sudan decided last week to suspend its daily oil production of 350 barrels after it accused neighboring Sudan of stealing crude passing through pipelines on its territories to export terminals in the Red Sea.

Khartoum defends its decision to confiscate South Sudan’s oil, saying Juba has failed to pay transit fees since the south seceded from Sudan in July last year as per a 2005 peace deal that ended decades of civil wars between the two sides.

Land-locked South Sudan, seeking an alternative route to export its oil, signed a deal with neighboring Kenya to construct a pipeline to the port of Lamu.

On Wednesday, South Sudan’s cabinet held an extra ordinary meeting chaired by Vice President Riek Machar to receive updates from the minister of Petroleum and Mining, Stephen Dhiew, on the progress of suspending oil operations.

Minister Dhiew was given two weeks by the government to complete shutdown of 601 oilfields in Unity and Upper Nile States, where most of the country’s oil wealth is concentrated.

During the meeting, Oil Minister However Dhiew assured the Council of Ministers that his ministry would complete the suspension process of within the two-week deadline.

The minister of Information and broadcasting, Barnaba Marial, told the press after the meeting that a taskforce had already been set up to oversee the completion of the shutdown process.

Marial announced that all oil companies in Unity state had successfully terminated their operations while other companies in Upper Nile state are very slow in implementing the resolution of the government.

The minister further said that the Council of Ministers considers planning for construction of another oil pipeline to Djibouti through Ethiopia, in addition to the one to Lamu Port in Kenya.

He also added that another resolution was passed directing the minister of Petroleum to urgently build one oil refinery that would be ready for use in South Sudan within the next four to six months. According to Marial, the plan also includes construction of two additional refineries in the near future.

Sudan Tribune has learned that an American company expressed its readiness to build the refinery within six months and held serious discussion with the government in this regard on Wednesday.

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