South Sudan threatens to sue dealers over its “stolen” oil

By Ngor Arol Garang

January 10, 2012 (JUBA) – South Sudan’s oil minister said Tuesday that north Sudan was siphoning off his country’s oil, threatening to instigate legal proceedings against any country or company involved in buying the allegedly stolen crude.

Since landlocked South Sudan seceded in July 2011 – taking with it 75% of the Sudan’s known oil wealth – the two countries have failed to negotiate a fee for the South to export its oil using north Sudan’s infrastructure.

Last week the South Sudanese government threatened to sue Khartoum over its decision to unilaterally impose monthly charges on its crude oil transported through its pipelines.

“Rather than view the New Year as an opportunity for renewed cooperation, the government of Sudan unilaterally decided to impose economic sanction[s] by blocking exporting our crude and stealing our oil”, Stephen Dhieu Dau, Minister of Petroleum and Mining told journalists in Juba.

Dau accused north Sudan over five issues related to the export of its crude oil:

• ordering foreign oil companies to divert South Sudan’s crude oil entitlement for December 2011 into refineries in Khartoum and El-Obeid.

• diverting South Sudan’s monthly production of 550,000 barrels for December to buyers of its own entitlement.

• beginning the construction of a new pipeline to permanently divert 13% of what he called “Dar Blend”.

• preventing two ships carrying 1.6 million barrels of crude oil belonging to South Sudan, as well as preventing one additional vessel from leaving Port Sudan.

• prevented two other ships from entering the port to take possession of 1.2 million barrels of Nile Blend Crude purchased from South Sudan by international buyers.

South Sudan’s oil minister said he denounced the unilateral acts, and described the diversion of its crude oil without its consent as nothing less than” theft”. Dau said that preventing loaded ships from leaving Port Sudan was “unlawful” constituting a clear violation of “international laws” and “norms”.

He said Sudan would take responsibility for all penalties and damages resulting from the “theft” and delays in the shipping schedules.

South Sudan is considering building a pipeline to Kenya to bypass having to use north Sudan’s infrastructure but this is years away from being achieved. In the six months since South Sudan became independent the two countries have failed to reach agreement on oil, assets, debt, citizenship and how to demarcate the poorly defined tense new international border.

The two countries are due to resume bilateral talks this month. The Sudanese president Omer Hassan al-Bashir last week said that South Sudan was not negotiating in good faith and accused Juba of not paying fees for use of its facilities.

Most of the oil fields lie near the border. South has claimed Khartoum is arming South Sudanese rebel groups in order to destabilise the new country and retake control of Unity State’s oil fields.

Khartoum denies this and counters that Juba aids rebels in its territory. South Sudan also dismissed the claims and has accused Sudan’s Armed Forces of bombing South Sudanese territory in recent months.

Macar Aciek Ader, an undersecretary at South Sudan’s oil ministry told the press briefing in Juba the world’s newest country would incur “huge economic” damage if Khartoum continued its stance. South Sudan is one of the poorest regions in the world, with oil accounting for around 98% of the government’s annual budget.

“I really do not know what would happen if Khartoum continues to behave like this. I do not know how much loss it would be, but I think our country would incur huge economic impact”, Ader said.

Minister Dau warned that countries or companies who purchase oil from Khartoum that was “stolen from South Sudan” would face legal action.

“The Government of Sudan and all those that benefit from such illegal acquisitions will find no refuge from South Sudan’s legal authorities and will enjoy no future business with the Government of South Sudan,” the minister warned.

He denied reports alleging that his country was not paying Khartoum charges for using its oil infrastructure including transport and processing fees.

“It is disappointing to mention that Khartoum continues to deny that South Sudan pays charges for the use of its infrastructures. South Sudan is already being charged and is paying pipeline operators significant fees to produce and transport it[s] oil through Sudan but Khartoum remains spreading lies that South Sudan is not paying for the use of its infrastructure”, the minister said.

Barnaba Marial Benjamin, South Sudan’s minister of information, at the same briefing warned Khartoum to treat the world’s newest nation like an independent state with its own territorial sovereignty and resources. He repeated the allegation that north Sudan’s army intended to invade his country because of oil.

However, he said that South Sudan’s military (SPLA) would not let this happen.

“Khartoum thinks that it can invade South Sudan like what Iraq did to Kuwait in 1990. Don’t we know what happened to Iraq? Where is Saddam Hussein now”, minister Marial said.

Marial argued the fact that his country was willing to offer financial assistance of $2.6 billion cash and to write off $2.8 billion of debts and arrears which he said Khartoum owes the people of South Sudan.

This he stressed should be seen as an indication of a country willing to forge better relations with its neighbour.

Both North and South Sudan are currently involved in series of negotiations on several outstanding post-independence issues, under the mediation of the African Union High Implementation Panel on Sudan (AUHIP).

In recent months, however, both countries have continuously accused each other of supporting rebellions seeking to destabilise respective governments. While the north points fingers at its southern neighbour for allegedly backing rebels in South Kordofan and Blue Nile, the south accuses the north of backing armed rebel movements seeking to topple the Juba government.

(ST)

Additional reporting by Julius N. Uma