Khartoum sells South Sudan’s oil at discount as Juba vows to sue buyers

January 27, 2012 (NAIROBI) – South Sudan has threatened litigation against those who purchase its oil from neighboring Sudan after Khartoum reportedly sold crude seized from the newly independent state at millions of dollars discount.

A bitter dispute between the recently separated countries over the fees land-locked South Sudan should pay for the use of Sudan’s pipeline infrastructure to export its oil has escalated dramatically in recent weeks after Juba accused Khartoum of diverting oil to its refineries and blocking shipments.

South Sudan says Khartoum has “looted” revenues amounting to $815 million, according to its president Salva Kiir Mayardit, while Sudan says it confiscated oil after Juba failed to pay any transit fees since the South seceded from Sudan in July last year, taking with it over 70 percent of Khartoum’s oil wealth.

As talks to resolve the dispute floundered, the south decided to shut down oil production countrywide and seek an alternative route to export the commodity.

It was revealed on Friday that Sudan has sold a shipment loaded with 600,000 barrels of crude it seized from South Sudan to a north Asian trader at a discount as steep as $14, Reuters reported, citing anonymous sources.

According to Reuters, this indicates an $8.4 million discount for the whole cargo versus the last official price charged by the South.

The sold crude was loaded onto three tankers from January 13-20, according to South Sudan’s justice ministry.

“This is crude from the South sold by the North at a $14 discount to the South’s last selling price,” Reuters quoted a Middle East-based crude trader as saying. “The tanker is heading to Singapore,” another source said.

South Sudan’s Minister for Information and Broadcasting Barnaba Marial Benjamin said, when contacted by Sudan Tribune on Friday, that he was not aware of the reports on Khartoum’s discounted sale.

However, he warned that legal action awaits the government of Khartoum and anyone who buys South Sudan’s oil from it.

Benjamin noted that his country had already issued an international legal notice warning potential buyers that they risk lawsuits if they deal in South Sudan’s “stolen property”

The minister further said that South Sudan would also sue the government in Khartoum if it indeed sold South Sudan’s oil.

(ST)