South Sudan appeals to US for support in attaining its “economic independence”
January 29, 2012 (JUBA) – The newly independent Republic of South Sudan has sought financial support from the world’s biggest economy, the United States of America, to help consolidate its “economic independence.”
Since the signing of the 2005 peace agreement and before its impendence on 9 July 2011, the South Sudan has been almost entirely depending on oil revenues from its crude oil that passes through Khartoum’s pipeline to Port Sudan for sale in the international market.
However last week South Sudan decided to shut down the oil production countrywide, accusing Khartoum of stealing its oil, diverting some of the crude to secret oil reservoirs through a newly constructed illegal pipeline and blocking ships carrying South Sudan’s oil.
Khartoum claimed it was confiscating the oil because of unpaid fees by Juba. However, South Sudan denied Sudan’s claims, saying they have been paying other fees to Khartoum including for central processing facility and marine terminal. However, they have acknowledged not paying for transit fees since an agreement was yet to be reached first between the two on the amount of charges to be paid per a barrel.
On Saturday, a high level delegation from the US administration, led by the Deputy Secretary of State, William J. Burns visited Juba and met with the Vice President, Riek Machar Teny, during which they discussed issues surrounding the shutdown of the oil production and the way forward.
The US Deputy Secretary of State was accompanied by the Special Envoy to Sudan and South Sudan, Princeton Lyman; Assistant Secretary, Bureau of African Affairs, Johnnie Carson; Special Assistant to President Barrack Obama and Senior Director for African Affairs, Grant Harris; and Ambassador to South Sudan, Susan Page.
In a statement released by the Vice President’s Press Secretary, James Gatdet Dak, Machar briefed the delegation about Khartoum’s behavior which forced South Sudan to shut down the oil operations as well as the failure of the AU’s mediated negotiations in the Ethiopian capital, Addis Ababa.
Machar appealed to the US government to help the new nation attain its “economic independence.” He had earlier criticized Khartoum of behaving as if South Sudan was still economically dependent on Khartoum despite the region becoming politically independent since 9 July 2011.
He also said the oil shut down would now give opportunity for the new nation to critically explore others sources of non-oil revenue and maintain the salary and important services for a year before completing the construction of the alternative pipeline.
Machar also said the process of oil shut down revealed that the South was producing more crude oil than previously believed.
President Salva Kiir personally intervened in the talks in Addis Ababa on Friday to try to bridge the gap with President Bashir of Sudan but the two sides could not reach an agreement.
Some members of the South Sudanese delegation who participated in the negotiations revealed that the AU panel proposal was too soft on Khartoum. It could not even question the justification by Khartoum to demand transit fee of $32 per barrel when the international practice, even in the African continent, clearly indicated that most of the transit fees are less than $1 per barrel.
South Sudan has inked a memorandum with its Kenyan counterpart to construct an alternative pipeline from its oilfields to Port of Lamu which can be completed in less than one year. It also seeks to reach a separate agreement with Djibouti and Ethiopia to build another pipeline to the port in Djibouti.
Juba is also implementing plans to build at least three refineries. One would be built in six months with the capacity of 6,000 barrels per day for domestic consumption while two other bigger ones would be constructed for regional market in the next one and a half years.
For instance, according to the revelation by the minster of Petroleum and Mining, Stephen Dhiew Dau, which was published on Friday, Unity state alone has been producing up to 600,000 barrels per day instead of over 300,000 as previously believed. Upper Nile state was also discovered to be producing even more.
Khartoum used to say the two states of South Sudan were producing only 500,000 barrels per day.
The Vice President informed the American delegation that Unity state had completed its shutdown process while Upper Nile state will completely shut down in two days.
The US delegation expressed concerns and the need to help in addressing some of the challenges arising from the oil shut down.
(ST)