S. Sudan denies responsibility for fuel shortage and discusses new pipeline option

By Ngor Arol Garang

July 6, 2011 (JUBA)- The South Sudan’s minister of oil on Wednesday denied responsibility for the ongoing fuel crisis in the region and instead accused the government in Khartoum of terminating companies contracted by the Government of South Sudan (GoSS).

The minister denied that the money allocated for delivery of the fuel from the Khartoum to Juba was US$10 million but SDG10 million (US$3.7 million) of which 75% of the agreement has been fulfilled.

On 9 July South Sudan will declare its independence. This comes as a conclusion of the Comprehensive Peace Agreement (CPA) signed with North Sudan in 2005. A stipulation of the agreement was the right of the South Sudanese to vote in a plebiscite in 2011. In January they voted for secession.

The vast majority of South Sudan’s money comes from oil but how the sharing of oil-rights with North Sudan will work has not been dealt with yet. South Sudan will become one of Africa’s most oil-rich countries but it lacks infrastructure. There have been discussions regarding capacity building in the potentially lucrative agricultural sector but this will take time.

“I want to correct one thing from the media reports attributed to the petroleum minister in the Government of National Unity. I do not know whether he was misquoted or if that was what he said” said the energy and mining minister, Garang Diing Akuong told the press in his Juba office on Wednesday.

“There have been reports from the media in recent days quoting him as having said that US$10 million was given to the ministry of energy and mining to contract nine contractors to deliver fuel from Khartoum to Juba […] This is not correct, this money was not given to the ministry of energy and mining to deliver fuel to the general public” said Akuong.

“The money was given to support security operations along strategic areas during referendum, and what was given was not US$10 million, it was SDG10 million,” he said .

Akuong said he came to the office when nine contractors were contracted but failed to deliver any fuel to South Sudan because the Khartoum government did not allow the delivery of fuel.

“When I came to the office I found nine contractors but the government in Khartoum did not allow them to deliver any fuel to the south, arguing that the agreement does not indicate delivery of crude oil”, explained the minister, denying that any individual account was used to receive money meant for July.

“The sales of the oil are always transferred to the account of the government of south. In this case, the American bank called City transferred the money to a bank with its branch account in Kenya, where it was coordinating how to send this money to the bank of South Sudan,” he said, referring additional queries to the minister finance and economic planning in the GoSS.

He explained that GoSS would only review contracts signed with international companies before the signing of the CPA. He accused Khartoum of demanding too much in the negotiations on how to split the oil after South Sudan secedes from North Sudan.

“We failed to reach any agreement in the last discussions in Ethiopia because the north was raising a lot of unnecessary demands. We accepted to pay rental charges for the usage of pipes but they did not accept. They said they wanted to continue getting the share without giving any convincing explanation,” he said.

The minister said GoSS had been forced by recent relations with the north to consider other options including a pipeline either to Kenya or Uganda.

“We have no problem hiring the pipes that are in the north but it is the government in the north which is complicating everything. In fact transporting the fuel from the north is cheaper than buying and transporting it from an East Africa oil refinery. They also buy it. So it becomes more expensive there than in the north,” he said.

Anthony Lino Makana, GoSS roads and transport minister, in a press briefing on Wednesday said South Sudan was in talks with several oil firms to build a 200 kilometre link to the existing pipeline running from Mombasa to Eldoret in Kenya.

Makana said building a pipeline was “very easy for us”, arguing that the construction cost would require “a few million dollars”.

He said such a pipeline would help the south export its oil to African neighbours such as Kenya, Uganda, Congo, Rwanda, Burundi, Tanzania and Ethiopia.

Makana said some oil fields contained more gas than oil, making it “economically viable to extract gas and then oil from some fields.” He gave no indication of how long such a project might take.

“We will have nothing to lose if the north refuses to allow us to hire the pipes, they will be the ones to lose. They have tried and it did not work well for them when they blocked the commercial routes. […] We have the alternative routes to get essential supplies we need. They know it very well that when they closed the border we have the road to Ethiopia. The traders from Upper Nile were able to get goods from Ethiopia.

“We also had the road to Uganda and the roads to Kenya were opened. The blockage of the road actually became an opportunity for East African business communities. So, the punishment they had contemplated against the South became returned to them,” explained Makana, who said his ministry is prioritising the construction of feeder roads to support agriculture projects in the region.

(ST)