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Still no outlet for South Sudan’s oil

Jared Ferrie Juba

Sudan was blocking South Sudan from restarting oil production as agreed in a September peace agreement, South Sudanese President Salva Kiir said on Tuesday.

South Sudanese President Salva Kiir arrives at Khartoum Airport in this October 8, 2011 file photograph.To match Special Report SOUTH-SUDAN/GOVERNORS REUTERS/Mohamed Nureldin Abdallah/Files (SUDAN - Tags: POLITICS). Credit: REUTERS

Khartoum was demanding that Juba must stop supporting rebels fighting in the Sudanese border states of southern Kordofan and Blue Nile before it would allow oil to pass through its pipelines, he said. South Sudan denies backing the group and accuses Sudan of funding proxy fighters south of their shared border.

“We were supposed to restart oil [pumping] on November 15, five days ago,” Kiir said in Melut, 625km north of the capital, Juba. He flew there to lay the cornerstone for South Sudan’s first oil refinery, a 10 000 barrel-a-day facility.

“Suddenly, Khartoum people changed their minds.”

South Sudan halted production in January after accusing the northern government of stealing $815 million (R7.2 billion) of its oil, which Sudan said it took to recover unpaid transportation and processing fees. That and other disputes, including over border security, brought the countries to the brink of war in April.

Sudanese President Umar al-Bashir and Kiir signed a series of agreements on September 27 to end the conflict, including an oil accord that stipulates a fee schedule.

Landlocked South Sudan acquired three-quarters of the formerly united Sudan’s output of 490 000 barrels a day when it declared independence in July last year after a two-decade civil war.

The US was “increasingly concerned” that implementation deadlines in the September accord were being missed, State Department spokeswoman Victoria Nuland said on Monday.

“We are also disappointed by delays in the resumption of oil production,” she said. “This denies much-needed revenue to both economies, and we urge both parties to resume production while they work to resolve other bilateral issues.”

South Sudan’s $9bn economy is expected to suffer a “massive drop in gross domestic product” because of the shutdown, according to the National Bureau of Statistics.

Economic growth slowed to 1.9 percent in 2011 from 4.2 percent a year earlier, it said last month. Oil provides 98 percent of state revenue in the world’s newest country.

Sudanese Foreign Affairs Ministry spokesman al-Obeid Murawih was not available to comment yesterday. Sudan’s parliament speaker said on Sunday that South Sudan was still supporting rebels in violation of the peace accord, the Paris-based Sudan Tribune website reported.

Oil in South Sudan is pumped mainly by China National Petroleum, Malaysia’s Petroliam Nasional and India’s ONGC Videsh. – Bloomberg

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