Khartoum says it lost $5 billion as a result of Juba’s oil shutdown
September 5, 2013 (KHARTOUM) – Sudan has lost around $5 billion dollar during the period when its southern neighbor moved to suspend its oil production for a little over a year following a dispute between the two sides over transit fees.
The deputy governor of Sudan’s Central Bank Badr al-Deen Mahmoud said in press statements has lost $5 billion out of $20 billion worth of oil that was not exported during the stoppage.
He said that out of the $20 billion, $11 billion was to be Juba’s share and $4 billion belonged to the oil companies.
Disagreement over oil charges prompted South Sudan to shut down oil production in January 2012, accusing Sudan of stealing its oil and diverting it into other pipelines. The two sides signed an agreement in September 2012, allowing Juba to resume export through Sudan which came into effect last April.
Before the shutdown South Sudan’s 300,000 barrels per day provided 98% of the government’s revenue. The closure has also affected Sudan’s economy, which lost 75% of its oil production when South Sudan seceded in July 2011.
Sudan’s only hope to cushion the adverse affect of losing the south is to get a cut out of every oil barrel exported through its territories.
Mahmoud said that South Sudan’s oil transit fees will lead to a 30% decline in the exchange rate of the dollar against the Sudanese pound and will settle at 50% lower rate later.
Sudanese pound lost more than half of its value in the black market since South Sudan’s independence and the government resorted to a limited devaluation to alleviate the chronic shortage of dollars in the market. But this was met with little success.
The Central Bank official said he believes that the implementation of the agreements signed between the two countries will benefit the two sides.
He disclosed that the Central Bank of Sudan ordered all banks to facilitate bilateral trade with South Sudan in terms of payments and withdrawing money.
Mahmoud expressed hope that the improvement in relationship between Khartoum and Juba will convince the international community to look more favorably on cancelling Sudan’s debt.
In a related issue, the Sudanese Oil Minister Awad Ahmed al-Jaz sent a letter to oil companies effectively retracting orders from last June to prepare for shutdown in line with president Omer Hassan al-Bashir’s orders at the time who was responding to what he said was Juba’s continued support of rebels fighting his government.
The oil minister said that this measure comes in light of the talks held between Bashir and South Sudan president Salva Kiir in Khartoum last Tuesday.
South Sudan is producing 180,000 barrels of oil per day (bpd) and plans to add 20,000 bpd after Sudan abandoned its threat to halt flows, Nicodemus Ajak Bior, the ministry’s press officer, told Reuters.
“Technical teams are meeting and plan to increase the production starting within the next two weeks,” he said. “Preparations are on.”
(ST)