South Sudan reiterate rejection of high oil transit fees Article Comments (14) Email PrintSave --------------------------------------------------------------------------------
August 14, 2011 (KHARTOUM) – South Sudan is not prepared to accept the fees proposed by Khartoum in return for transporting the oil produced by the landlocked state, a Southern official said today. moveoneinc.com “The amount of money Khartoum wants us to pay is unreasonable,” David Loro Gubek, undersecretary at South Sudan ministry of energy and mining, told Reuters in an interview. Although South Sudan became an independent state early last month many thorny post-secession issues such as border demarcation, Abyei, national debt and most importantly oil have yet to be resolved. The bulk of oil produced in pre-secession Sudan was produced in the South and officials in Khartoum have been warning citizens in the North of hard days ahead as exports of oil were the main source of income and hard currency over the last six years since the signing of the Comprehensive Peace Agreement (CPA). Sudan has been banking on recovering part of the lost revenue by charging fees to the South for using the pipelines running through the North all way to the coastal city of Port Sudan. It has been reported that Sudan asked for $32 per barrel for the service, something which South Sudan vehemently rejected. This is worth roughly a third of South Sudan’s export value at current prices. according to Reuters calculations. Last month, Sudan’s parliament approved an alternative 2011 budget that lawmakers said included an annual income of $2.6 billion for transit fees — the same amount expected for the loss of South Sudan’s oil production. “If Khartoum insists that unless we pay they are not going to allow us to use these things, then the Republic of South Sudan... could request them to close the pipeline because it is discriminative” Gubek said. The minister said the South may seek other alternatives including building a separate oil pipeline if the North insists on the $32. “We are not the only country exporting oil through their neighbor’s land... Why should ours be terribly high” Gubek said. “If we are forced, we will put in a separate pipeline”. This month Sudan blocked a 600,000 barrels crude cargo for at least 24 hours saying that Juba needs to pay custom duties before the oil shipment can be allowed to proceed. It was later released however on unknown terms. Gubek said that they have received offers from several international companies offering to fund a new pipeline that runs through neighboring Kenya. “Companies including Chinese, Japanese, South Koreans and other Middle East countries are prepared to fund the pipeline up to Lamu,” he said. He noted that China, which buys a substantial part of its oil from Sudan, appeared keen on supporting the new state as much as they do to Khartoum. “The Chinese also want to please us equally. It is the Chinese who built the pipeline and it is the Chinese who built the refinery in Khartoum,” Gubek said. On Monday, Chinese foreign minister Yang Jiechi visited Khartoum in the first high-level visit of a Chinese official since South Sudan became independent. He later left for talks in the southern capital Juba. The Saudi-based Al-Sharq Al-Awsat newspaper said this week that the Chinese official informed Khartoum during the visit that their proposed fees is "exaggerated". The African Union (AU) panel led by former South African president Thabo Mbeki has been trying to bridge differences between the two sides on the oil fees but has been unsuccessful so far. (ST) -- You received this message because you are subscribed to the Google Groups "JFD info" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/jfdinfo?hl=en.
