Home | News    Wednesday 1 February 2012

South Sudan denies rumours of close ties between Khartoum and oil firms

By Ngor Arol Garang

January 31, 2012 (JUBA) - South Sudan on Tuesday denied scrutinising rumours regarding the close links between two international oil companies, who work in the new nation, and the Sudanese government.

South Sudanese express their support as President Salva Kiir declared a halt on all oil operations in South Sudan, in Juba January 23, 2012. (Reuters)

Some senior member of the South Sudan’s ruling party Sudan People’s Liberation Movement (SPLM) claim that the Swiss oil traders Vitol and Trafigura had worked closely with Sudanese government during the years of war before the signing of 2005 peace agreement.

They claimed Vitol uses to extend Khartoum "advance substantial financial support" to secure future oil. The same officials also accused Trafigura of brokering the then Sudan’s oil at the European and international markets and funding Khartoum’s efforts for war.

The SPLM officials wondered why the same companies whose records have not been verified are allowed to enjoy a fairly easy entry into the South Sudanese oil market despite their links to the National Congress Party (NCP).

However, Stephen Dhieu Dau, the South Sudan’s oil minister in an interview with Sudan Tribune on Tuesday categorically denied that the two international companies were in anyway linked to Sudanese government or its security apparatus as it is alleged.

"I don’t think they have political link to the government in Khartoum. What I know is that they are independent international companies. If they have links with Khartoum their crude oil which they brought from us would not have been confiscated," Dau told Sudan Tribune in an interview on Tuesday.

Minister Dau further disclosed that: "We have actually concluded discussions with them. I just held a meeting today with one of the engineers tasked to construct mini-refineries in Unity State”.

He however explained that the shutting down process which came as the result of the oil crisis did not allow the company to start the construction operations on time but that they are committed to proceed with the construction plan.

"The work should have actually started early but got delayed by this crisis," he explained.

The senior official however declined to comment on reports alleging that another trading company, Glencore has signed a joint venture with the South Sudan oil trading company, Nilepet, to build its trading capacity.

Glencore is the world’s largest commodities trading company. Unconfirmed reports claim that its founder, Mark Rich, is often remembered for tax evasion and dodging sanctions 30 years ago.

A highly placed source in the ministry of national security said in a separate interview that they "are aware of these allegations and they are being investigated. Some of our personnel are collaboratively working with the ministry of petroleum and mining to study profiles of each of the oil companies".

"The intention of these studies is to find out who are the real owners of these companies. Another reason is to verify political ties and links with the NCP," he stressed.

The source, who spoke on the condition of anonymity because he was not authorised to speak to the media on the issue, further said the government have been fully aware of the allegations which are circulating in the public domain for "a long time".

"These allegations have been circulating around in the public sphere and the government started hearing about them before this country could officially become an independent state in July, " he added.

Although allegations of oil theft had forced the new state of South Sudan to shut down all oil production, America, China and the African Union are all trying to persuade the parties to come to an agreement. They claim it is everyone’s interest for the oil to keep flowing.

South Sudan had threatened legal action against the Sudanese government claiming that this is theft.

Speaking earlier about the companies buying the South Sudanese crude, an official said, "it is high time for our government to start holding these companies accountable”.

(ST)