Conflicting reports on Sudan’s decision to stop south’s oil exports
November 28, 2011 (KHARTOUM) – The Sudanese government on Monday issued contradictory statements on whether it actually decided to stop South Sudan from exporting its oil through the pipelines that runs through the north into Port Sudan.
Osman accused Sudan’s southern neighbor of reneging on its financial obligations adding that South Sudan owes $727 million on four shipments of oil released and transferred through the oil installations in the north.
He further said that Sudan dealt with the south in a “fatherly spirit and responsible manner”.
The Sudanese official however qualified the decision saying it would not apply to non-government oil exports.
“We are not going to shut the pipeline, we’re not going to shut any well, we are not going to stop any company, because we have an agreement with the companies. The share of the companies will be exported,” Osman said.
But a South Sudan oil official said a 600,000 barrel oil shipment sold by South Sudan to China’s Unipec did not load as scheduled on Monday because of Sudan’s decision.
A 1 million barrel oil shipment sold to trading house Vitol is due to load on Tuesday but will not “unless there is a change of mind today,” Macar Aciek Ader, undersecretary at South Sudan’s ministry of petroleum and mining, told Reuters.
“We were supposed to load 600,000 barrels today, but it didn’t load,” he said by telephone, adding the buyer was Unipec, trading arm of China’s top refiner Sinopec Corp.
Last July South Sudan became the world’s newest country after voting for independence in a January vote, taking with it three-quarters of the former united country’s roughly 500,000 barrels per day of oil production.
Sudan has been hoping the fees it will receive from landlocked South Sudan in exchange for exporting its oil through the north’s pipelines could help to cover the deficit in its budget. However, the two sides are still deadlocked in negotiations over the amount South Sudan should pay.
Last month, the Sudanese president Omer Hassan al-Bashir threatened to take unspecified measures by the end of October if no deal is reached with the south on oil transit fees.
But well placed sources speaking to Sudan Tribune in Khartoum today denied what the state minister of oil announced and spoke of intense negotiations in Addis Ababa over the issue of oil.
The Sudanese delegation led by Idris Mohamed Abdel-Gadir complained to the African mediation led by former South African president Thabo Mbeki that Khartoum is almost going bankrupt since the breakup of the country.
The sources added that Abdel-Gadir’s team proposed that the two countries refer to international trade standards on collecting oil transit fees. The arrangement could be temporary until a final deal is sealed.
Mbeki on his end suggested that a compromise on by which Khartoum gets a percentage of annual oil exports that would include the transit fees to help Sudan overcome the current economic crisis.
In return for that Sudan would facilitate border trade and open ports for the flow of goods to South Sudan.
The government delegation was pushing for a deadline by which an agreement on oil is inked, the sources said. Khartoum is expected to submit written responses to the mediation its proposals.
Analysts say that any decision by Sudan stopping oil flow could affect its relations with countries like China which is the largest buyer of the crude from the East African nation.
China, which has been aggressively pursuing natural resources in Africa to fuel its economic growth, has maintained close ties with Sudan throughout a U.S. trade embargo. North Sudan was the sixth-largest source of Chinese oil imports in 2010.
In a related issue Sudan threatened to resort to international courts to compel a reversal of decision by the government of South Sudan to seize shares of Sudan’s oil firm Sudapet and transferring it to to South Sudan’s oil-firm Nilepet.
(ST)