Home | News    Thursday 16 February 2012

South Sudan challenges Khartoum to produce backup for high fees demanded


By Ngor Arol Garang

February 15, 2012 (JUBA) - South Sudan on Wednesday said the government of neighbouring Sudan has “failed” to produce genuine reasons that support their demand for high charges in return for using the oil pipelines passing through its territory.

A government supporter holds a banner during a speech by South Sudan’s President Salva Kiir outside parliament in Juba January 23, 2012 (Reuters)

Speaking at a press conference, held at the National Secretariat headquarters of South Sudan’s ruling Sudan People’s Liberation Movement (SPLM), the chief negotiator for South Sudan delegation Pagan Amum told journalists shortly after his arrival from the Addis Ababa that talks could not go ahead because the Sudanese had nothing at their disposal that supported their calculation for oil transit fees.

“The Sudanese delegation has raised charges from $32.02 to $36.00 per barrel. This $36 charge is undeniably discriminatory because since these pipelines were built and since the transportation agreements were concluded, the Republic of South Sudan has not been the only shippers. There have been companies operating in Sudan and have never been charged $36. The example being Petro Energy operating in the North and WNPOC in the south [which] secured the right to ship through the pipeline but have never been charged $36”, Amum explained.

The senior member of the ruling party explained further that companies shipping through the pipeline are all paying tariffs consistent with the transportation agreements.

“This means that the proposal of the government of Sudan to charge Republic of South Sudan $36 is a clear violation of the international law and state practice which is not acceptable. The charges being proposed by the government of Sudan do not have any basis. The only defence that Sudan makes is that Sudan is sovereign state and that its sovereignty overrides everything”, he said.

Amum also denied claims by Khartoum that his country had not paid transport fees since it became an independent state in July 2011 and argued that oil companies have clarified this in a letter dated 3 January addressed to two ministers in the Republic of South Sudan and Sudanese minister in Khartoum.

The letter seen by Sudan Tribune on Wednesday bears signatures of the three oil companies, states “we wish to clarify that tariffs, as computed under COTA, are charged on the crude oil originating from the Republic of South Sudan including crude oil entitlements whilst processing charge is also imposed and paid through the cost oil recovery mechanism”.

“PDOC is advised to charge all shippers from the republic of South Sudan the tariff ceiling of 5.5 dollars per barrel as of July 2011, tariff and onwards”, reads the letter dated 8 August 2011.

The letter which bears signature of Azhari A. Abdalla, a Director General with Oil Exploration & Production Authority (OEPA) in the Sudanese ministry of oil was addressed to the PetroDar Operating Company in Sudan (PDOC) president, Liu Yingcaj and copied to Bior Ajang Duot, vice president of PDOC.

“From the information provided by JOCs, since secession, all the JOCs are continuing the usual established practice by issuing tariff invoices to the relevant shippers and also recovering costs of the processing facilities through cost recovery mechanism. These practices apply to all oil including crude produced in South Sudan,” adds the letter bearing signatures of presidents of the three oil companies.

Amum says Sudan has “no case” to make against the South.

“We have been paying. The companies have testified but then Khartoum changed the statement and said South Sudan needs to deal directly with Sudan in transport charges, as it is the one responsible with the transport system” Amum said.

The South Sudan official said his country remains ready to resume oil production through the north but only if a fair deal is reached.

“Our position has been clear from the outset. We need a fair deal with Khartoum and guarantees that it will not make unilateral decision again to confiscate our oil on the way to the international market while passing through Sudan”, said Amum.

The senior official said his delegation’s tabled demands included:

• Immediately release all the detained vessels that are loaded in Port Sudan with Republic of South Sudan crude oil entitlements and not to prevent any vessel coming to Port Sudan with intention of taking possession of the republic of South Sudan sold crude entitlements.

• Immediately pay to the republic of South Sudan the market value of what has been confiscated diverted crude oil at the sale price contracted for the by the government of South Sudan and its purchasers and the market value for any republic of South Sudan oil diverted by the government of Sudan for inland lifting at the domestic refineries.

• The government of Sudan to indemnify all direct, indirect and consequential damages resulting from its unilateral actions, including demurrage claims from buyers whose ships have been detained the port. Payments by the government of Sudan to the Republic of South Sudan for stolen and diverted crude oil and any damages shall be immediate and not part of the arrears reconciliation process.

• Ensure access for crude oil originating from South Sudan to the transportation system based on the processing fees and tariffs stipulated in the terms of EPSAs and transportation agreements respectively for blocks, 1,2,4 as an excess capacity user and blocks 3,7 which South Sudan has been paying since 9 July 2011.

• Impose no other charges, surcharges, customs duties, imposts or taxes other than a transit fee, which shall be 0.69 and 0.63 dollars respectively in accordance with the international law and state practice.


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Kind regards,

The Sudan Tribune editorial team.
  • 16 February 2012 07:08, by kalib dinka


    • 16 February 2012 07:11, by backtoschool

      we should not just cray without seeing another alternative with international worldwide

    • 16 February 2012 07:21, by SeekingTruth


      • 16 February 2012 07:27, by SeekingTruth

        DEAR PAGAN,


        • 16 February 2012 08:04, by mohammed ali

          Truth, what papers you are talking about? Pagan is bluffing as usual! Certainly the companies are paying, but the GOSS is not paying!Why is he offering to pay $ 1 if he is already paying? Why did he offer to resume oil pumping if GoS agree to what he called reasonable fees .The logic would be;we will not pay as we have already paid. Moreover, there is no law which says how much you should pay!

          • 16 February 2012 15:01, by Paul Ongee

            Amum says Sudan has “no case” to make against the South because Khartoum’s economic survival is solely based on stolen South Sudan’s oil and continuous financial bailout. Wow, the economic outlook is really grim, scary,....you name it. Closing oil production doesn’t mean regime change in Khartoum as it dances first before yelling to the media. RSS can grant loan to Khartoum as Qatar did.

      • 16 February 2012 10:39, by Hardball

        Kenyans are working hard day and night with South Sudan to put their hands on $0.75 transit fee per barrel.

        Khartoum here is wishing, let’s asked for $ 36.00 per barrel and South Sudan will come to the middle for $ 18.00 per barrel, what a wishful thinking?!
        Who will beat $ 0.75 per barrel?

      • 16 February 2012 15:00, by Paul Ongee

        Amum says Sudan has “no case” to make against the South because Khartoum’s economic survival is solely based on stolen South Sudan’s oil and continuous financial bailout. Wow, the economic outlook is really grim, scary,....you name it. Closing oil production doesn’t mean regime change in Khartoum as it dances first before yelling to the media. RSS can grant loan to Khartoum as Qatar did.

  • 16 February 2012 07:14, by hellonearth

    i Challenge you Jalabia, have that paper ready for the 10th March.

  • 16 February 2012 07:17, by mosa mel

    Let them get the hell out of South Sudan oil and all resources of South Sudan. They are jealous.

  • 16 February 2012 07:26, by Ambago

    Talks with Khartoum at time around is just a waste of time. Keep it for PR purposes, but nobody should put hopes on them.

    Khartoum’s primary aim at this time is to see a politically unstable and financially bankrupt RSS while it battles SPLM-N and the Darfur movements. We can only blame ourselves for all these delays in decisions.

    • 16 February 2012 09:16, by mohammed ali

      Ambago, is stable and not bankrupt. A bank opened and after less than 2 years it went bakrupt and closed! What do you call this? No Sudan wants stable, peacful & prosporous SS .SPLA thugs & hate-mongers like you cannot do that job!

      • 16 February 2012 12:30, by P.K.M

        Here is the bad news that northerners don’t want to hear, there will be no more oil running through that pipeline to Port Sudan. Let them say it’s a joke, just in the way they use to say, South Sudan independent is a joke.

        • 16 February 2012 12:41, by Force 1

          It’s humorous that northerners warn South Sudan that they will suffer unless South pays them $ 36.00 per barrel transit fee.
          Really, we can’t wait then to see how that suffering is going to be when we use the alternative route to Indian Ocean.

  • 16 February 2012 07:30, by Land-of-Cush

    You want to stand stell on all demands you have given.
    Until north sudan will regret by themselves. just we want to hear the staring of pipeline building through Kenya within next to months.

  • 16 February 2012 07:37, by mohammed ali

    Commarade Pagan,you have shut your oil production that your absolute right.Why then asking ships to come to our ports? What we with is our right!To avoid oil " stealing" stop transporting it through our land, that is your right we are not disputing this!

    • 16 February 2012 09:07, by Daniel Buolmawei

      Mohammed, I know you hate Pagan Amum, but he’s right. Pagan is working for something that will benefit both South Sudanese and North Sudanese citizens. He wants something that will help South Sudan and North Sudan, and not like you who only focus on your own lives by disregarding lives of others. Proposing $36 per barrel is really selfish.

  • 16 February 2012 07:46, by wad balad

    This pagan amum guys is funny. Hes mad at what the SAF did to him back in the days. When ever he comes to these meetings he remembers the days he had donkey meat in the jungle while being chased by the SAF and then starts to talk like a donkey.

    We have just up’d the price sir, now its $36 keep talking too much and it will be $50 soon.

    • 16 February 2012 08:18, by Yanga Wani

      You have funny name "wadbalad". Such name is what we (BLACK AFRICANS hate the most. You Arab are stil having a day dream of being Owner of our BLACK LAND. My dear it is matter of time and I sure you (Arabs) will never rule no more.

  • 16 February 2012 08:38, by Daniel Buolmawei

    Brother Pagan Amum, I really like your fight against Khartoumers. I like the proposals you tabled, very interesting and well-articulated. Khartoum has to pay us back all stolen money before we agree anything. I lost faith in the so-called African Panels led by Mbeki. How come they let negotiators discussed something that’s against both domestic and international law such as $36 per barrel. Idiotic

  • 16 February 2012 08:55, by Anynya One

    Proposal by the Sudan gov. to charge South Sudan $36 is a clear violation of the international law. Now who wins? Again, claims by Khartoum that South -S. did not pay transport fee since it became an independent state in July 2011 is what makes Sossa feel great! This is yet to be discussed in the court shortly and ‘ll definitely cause Arabs’ to bite their cassock and quietly escape. Cont.

  • 16 February 2012 09:07, by Anynya One

    When duty to be paid on a particular class of imports or exports bears signatures of the three oil companies, which is signaling Khartoum that the heat is about burst on your face Miss Jalaba-Mohamed Arabs! What victory did you showed South Sudan here? If you Arab gays tend to bull-shitt around bombing borders all the time, creates imaginations of how to find out the best way to Cont.

  • 16 February 2012 09:13, by Anynya One

    It creates imaginations of how to handle Arabs with care and eat this “mini duck minds” or just suck Arab blood neck vessels like a vampire, while other Arabs watching it happening. How would you feel? Don’t you feel a little scary that this dudes we often slap, will blow Khartoum one day?

  • 16 February 2012 09:17, by Anynya One

    Did you gays imagine how the 2006 Lebanon War, also called the 2006 Israel-Hezbollah War and known in Lebanon as the July War. We didn’t do that in a week or so, coz South was none. I guess you understand what the fuck this black coke dude talking about. Put this middle finger under your ass and check it out before you get screwed. Have fun..

  • 17 February 2012 00:01, by BM Bol

    One doesn’t have to be a rocket scientist to see why Khartoum is insisting on such unrealistic and outrageous demands. They think that since oil represents almost 90 % of South Sudan’s revenue, the RSS leadership wouldn’t have any choice, but to give in to anything they demand. In simple nutshell, no agreement will be ever reached as long as Khartoum thinks they have the upper hand.

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