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South Sudan: Juba Shuts Down Oil Pipeline to North

The Nation (Nairobi)

Lucas Barasa

20 January 2012

South Sudan on Friday shut down its oil pipeline that runs through Khartoum to the export terminal on the Red Sea coast, worsening tension between the two countries.

The closure followed South Sudan’s persistent oil row with Sudan.

At a sitting chaired by President Salva Kiir, the Council of Ministers directed Petroleum and Mining minister Stephen Dhieu Dau to execute the decision immediately, Information minister Barnaba Marial Benjamin was quoted as saying.

South Sudan accuses its northern neighbour of stealing its oil intended for potential buyers overseas and constructing a secret pipeline to divert the produce.

Tensions escalated last week when Khartoum said it had started confiscating oil from landlocked South Sudan.

Sudan’s economy has been badly hit by the loss of two-thirds of oil produced to the South and the country is under pressure to ease the hardships of people already exhausted by years of conflict, inflation and a US trade embargo.

Over 75 per cent of the crude oil Sudan exported before the split in July last year came from fields in the South but most of the infrastructure is in the North.

South Sudan pumps around 350,000 barrels per day, according to officials. Although Sudan produces 115,000 barrels per day in its remaining fields, it needs it for domestic consumption.

South Sudan became Africa’s newest nation last July, but many issues remain unresolved including oil, debt and violence on both sides of the poorly-defined border.

Even after independence, the two countries are yet to agree on a transit fee for the South Sudan to use the pipeline that runs to the export terminal at Port Sudan.

The two were meant to conclude an oil agreement that would see them share revenue, with the South paying fees to export its oil through the North.

The African Union is sponsoring talks between the two countries but Sudanese Foreign minister Ali Ahmed Karti on Wednesday dampened hopes of a quick deal by dismissing the South’s criticism of its move as “childish.”

Mr Karti said his country would continue to take a share of oil from South Sudan to compensate for what it calls unpaid transit fees and said an oil deal was unlikely without an agreement on border and security issues.

On its part, South Sudan said plans were underway to build a pipeline to transport its oil through Uganda and Kenya to reduce over-reliance on Sudan’s infrastructure.

According to a South Sudan official, Japanese Toyota company had been on the ground carrying out a feasibility study, and work could begin soon.

Mr Pagan Amum, the ruling SPLM party secretary-general and chief negotiator on the pending issues of the 2005 Comprehensive Peace Agreement with Sudan, also revealed that they were in discussion with French oil company Total.

South Sudan and Sudan’s biggest conflict has been over oil revenues–the lifeline of both economies.

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