Sudan denies making concessions on oil transit fees
July 31, 2011 (KHARTOUM) – The Sudanese government on Sunday denied statements made by a senior official in South Sudan yesterday in which he claimed that Khartoum withdrew the rate of $22.8 per barrel it proposed on oil coming through its pipelines from its Southern neighbor.
The landlocked Republic of South Sudan (RSS) called the fee put forward by Khartoum as “daylight robbery” and threatened to seek other venues for exporting its oil.
Pagan Amum, minister of Peace and chief negotiator of RSS, said that in talks with Sudan in Addis Ababa it was agreed that the fee of $22.5 would be dropped and pricing in accordance with international norms would be used.
“This discussion brought to an end the attempt to impose discriminatory surcharges by the government of Khartoum, who announced they would impose $22.8 per barrel. They have withdrawn officially this position,” Amum said.
“We will be paying pipeline fees…and also we will be paying transit fees that are within the international practices and standards,” he added.
But the government sponsored Sudanese Media Center (SMC) website quoted state minister of finance and head of Khartoum’s delegation for economic negotiations Al-Fatih Ali al-Sideeg as saying that no such understanding was reached on transit fees and that discussions did not even tackle the issue of renting pipelines saying that the latter is to be determined by the oil ministry and RSS.
The Sudanese deputy governor of the Central bank Badr al-Deen Abbas also described Amum’s remarks as “incorrect”. The pro-government al-Rayaam newspaper quoted unnamed sources as saying that the economic talks with RSS in Ethiopia have collapsed.
The sources said that RSS refused proposals tabled by head of African Union (AU) panel Thabo Mbeki and stuck to its position on fees charged for using Sudan’s pipelines.
Sudan already built in the transit fees into the budget and estimated that it will generate $2.6 billion annually at the rate of $22.5 per barrel the South exports.
South Sudan became an independent state earlier this month following its citizens’ overwhelming vote in favor of secession from the North last January. Both sides however, have failed to resolve a wide array of issues that could prove toxic in their future relationship.
In particular the oil-rich nation could not agree with Sudan on how much fees should be assessed for exporting crude through its pipelines.
(ST)
Mi diit
Sudan denies making concessions on oil transit fees
i knew that the news rushed back to juba by pagan amum was not the correct one. amum always thinks of news he can carry so that he is welcome to juba as a hero. but we need the truth and facts before before we should praise someone for the job well done.
the real negotiations should continue.
Nhomlawda
Sudan denies making concessions on oil transit fees
Pagan Amum needs to learn from his mistakes of rushing to media without clear and concrete support to his proclamations. Pagan should always wait till a final document is signed before briefing media.
Pagan and Dr. Lual saga should serve as a lesson to Pagan Amum in the way he interacts with media.
Media will destroy his creditability if he is not careful.
mayom kuirdit
Sudan denies making concessions on oil transit fees
It might be true that Khartoum denies the agreement whereas it is true that Pagan Amum is now known for rushing any unconsolidated agreement or news into the media. This kind of behaviour was good in the past six years or more to give hope for the desperate citizens in the hands of Khartoum regime nevertheless, we are now in the Republic of South Sudan, a country hope for democracy, peace and equality for all. It is not bad Mr. Pagan to tell us what has been agreed but there are discrepancies between your statement and that of your negotiating team members to make it worse. Give us a clear statement in the future which has an absolute base to avoid losing your reputation in the long run.Long live to RSS
LOVER OF ORGANISMS
Sudan denies making concessions on oil transit fees
For how long shall the South continue the humiliation by North? The leadership in ROSS must make sure that things are made permanently now for the future generation; but for this to be done, negotiation for using pipeline will not be permanently reached at between the two sides as it will be an inherited negotiation for generations and i believe ROSS economic may collapse at an expected time when Khartoum decides to impose conditional charges.
Few years ago, i heard of an expression of interest by the Toyota company to connect the oil fields to Mombasa. I am completely wondering why the leadership of ROSS ignored such proposal but kneels down to beg Khartoum to sympathized.
Enough is enough and let us be ourselves now
LOVER OF ORGANISMS
Sudan denies making concessions on oil transit fees
Dear Mii,
Pagan might be true or false in his statement.
Khartoum gov’t is like a kind of snake with that uses both ends. when one has been blocked then it uses the other. We have all seen this for several times where they could agree on some thing but once back to Khartoum, they say no.
If you read about the history of the CPA, you will find that when Bashir accept a point in Kenya, he will deny it once in Khartoum. Not only this but also several negotiation held in Adis where foreign delegation reports some thing being reached but Khartoum says No.
We know them now and i believe, with time they will agree on what Pagan has reported.
Eastern
Sudan denies making concessions on oil transit fees
Republic of Sudan leaders have done their calculations and came up with a charge of $22.8 per barrel. They know how they arrived at that figure.
I am similarly requesting our technocrats to detremine the values of the shared national assets;pipe lines, refinaries, railway lines, ships, airplanes, factories, etc. For instance based on the value of say a refinery and oil pipe lines and terminals at the port, Republic of South Sudan (RSS)can use its share value to pay for services rendered to it such as refining and exporting her oil products. This will ensure that RSS does not pay for use of these facilities in cash but by using its share in those national assests. After all Sudan wants RSS to bear some burden of debt incurred by the former republic.Our technocrats should be vigilant when these national facilities are being valued. In the recent past the two parties were sharing oil revenues at 50% – 50%, though analysts say North was giving South 50% of undeclared total oil revenue. The Arab stocks beat our technocrats in this game for more than 5 years! This time RSS be vigilant. Sudan has assets overseas use a your bargaining power based asset values.
While RSS is using the oil infrastructure in the Sudan, there should be a conserted effort by the former to develop similar infrastructure to handle petroleum products in the new state.
The $22.8 should not overwhelm RSS. Government of Sudan has just started the war of figures, let our economists do the needful calculations. There are reputable asset valuers. Let their services be sought to help RSS squeeze what Sudan owes her in an internationally acceptable way. If Sudan rushes to cook figures not borne out of good faith, as is obvious here, most of national firms will go into liquidity; they will simply crumble. RSS is an interantionally recognised legal entity – it can sue and can be sued!
Though I am aware of the recent privatisation drive in the North of the former republic to sell-off government owned companies. This was done in anticipation of the looming challenges that will bedevil the wealth and debt sharing negotiation. This negotiation will be among the most difficult that will pit RSS versus Republic of Sudan. We need cool-headed but consistent individuals to be engaged. This kind of negotiation has to be professionally undertaken. I am aware of the Sudan using shrewed economists regardless of their political affiliation. RSS should do likewise. This kind of negotiation should not only be left to those in the higher echelon of SPLM. The outcome of these negotiations will be with South Sudan long after SPLM is gone from the political scene of the republic. You have read about the Sudanese “technocrats” defering with our “politician”. The later was just trying to gain political capital out of the suposedly “dropped exorbitant charges on using oil facilities” while the Sudanese technocrats said wait; this rushed announcement to the media is “incorrect”. Over to you!
Eastern
Sudani Logik
Sudan denies making concessions on oil transit fees
Eastern
You’re 100% right, informed economists are the key to everyone getting a fair deal. But given the history of the NCP, its obvious they will apply their usual tricks. And as long as the SPLM is negotiating with the Mafia gang of Al-Bashir its unlikely the two Sudans will ever have an amicable relation.