South Sudan describes closure of oil production as “economic liberation”

By Ngor Arol Garang

January 27, 2012 (JUBA) – South Sudan on Friday described closure of oil production as “economic liberation” from north Sudan at a time when the dispute over oil fees increased tensions between the two countries.

Having seceded from the north in July 2011 and taking with it three quarters of Sudan’s oil, South Sudan has continued to export its crude oil to international markets using northern infrastructure.

Sudan has confiscated South Sudan’s oil claiming it owes $1 billion in unpaid fees. Juba denies this saying it has paid the fees dismissing Khartoum’s offer of a $32 fee per barrel, arguing that it should pay a lower rate in line with international norms.

Speaking at a public debate on various topics on Friday, Majak D’ Agoot, the country’s deputy defense minister, said his country would only resume exporting through north Sudan if a fair deal was reached.

The decision was taken after wide consultation with MPs and at a grassroots, he said. The move is expected to have a negative effect on the economy as 98% of South Sudan’s budget is from oil revenues.

Juba has since announced that it will build a new pipeline to Kenya but it will be at least 10 months until the project is complete, the government says. Analysts however say that it will take longer.

The senior member of the country’s ruling Sudan People’s Liberation Movement (SPLM) said his country would prefer to leave the oil underground for the benefit of the next generation than have it confiscated by Khartoum.

South Sudan’s independence last year came after decades of conflict and there is still a high level of distrust between the two sides after six years of sharing power and wealth during the interim period.

From 2005 until July 2011 South Sudan’s oil was split 50:50 between north and south. Like many other post-independence issues, negotiations between the former foes have not yielded any major breakthroughs on oil, borders, national debt, assets and the disputed territory of Abyei.

(ST)