Statement by H.E. Salva Kiir Mayardit, President of the Republic of
South Sudan to the National Legislature on the current oil crisis
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Statement by H.E. Salva Kiir Mayardit, President of the Republic of
South Sudan to the National Legislature on the current oil crisis
January 23, 2012
Right Honorable Speaker and Honorable Members of the National Legislature
I am here today to brief this august house about the current crisis in
our oil industry. The crisis has reached a stage that is unacceptable.
On the 6th of December 2011, the Minister of Finance of the Republic
of Sudan informed our Minister of Petroleum that based on their
Petroleum Transit and Service Fees Act of 2011, as from 25 December
2011, all shipments will be allowed to leave Port Sudan only after
paying fees amounting to 32.2 dollars per barrel.
Immediately following this warning, they proceeded to block four ships
with 3.5 million barrels of Dar blend from sailing out of Port Sudan.
They have further prevented four other ships from docking at Port
Sudan. These ships have purchased 2.8 million barrels of Nile and Dar
blends but are unable to collect their purchases. To date, these eight
vessels remain under the control of the Government of Sudan with oil
worth 630 million dollars.
In addition to that, they have forcibly taken another 185 million
dollars’ worth of oil. In total, the revenue that the Government of
Sudan has looted since December amounts to approximately 815 million
dollars. Furthermore, they have completed constructing a tie-in
pipeline designed to permanently divert 120,000 barrels per day f
South Sudan oil, which is almost 75 percent of our daily entitlements,
to their refineries in Khartoum.
Your Excellences
The diversion of South Sudan crude oil has disrupted revenues that are
vital to the security and welfare of the people of South Sudan. At
this time, we have no guarantee that oil flowing through the Republic
of Sudan will reach its intended destination. We cannot allow assets
which clearly belong to the Republic of South Sudan to be subject to
further diversion.
Therefore, during the second Council of Ministers of 2012 meeting on
January 20, we unanimously decided that all oil operations in South
Sudan should be halted with immediate effect and no crude oil
belonging to South Sudan shall flow through the pipelines on the
territory of the Republic of Sudan.
The government stands ready to handle this situation; however, we are
mindful that it cannot be done without the collective support of this
august house. We have reached this point only after exhausting all
avenues including my sending envoys to Kenya, Uganda, and Ethiopia
last week. The presidents of those countries reached out to President
Bashir to ask him to stop taking unilateral decisions regarding our
oil.
The response from Bashir is that he will not stop taking oil until we
pay the exorbitant amount of 32.2 dollars per barrel, something that
is completely out of international norms and a precedence that we are
unwilling to set.
Insomuch as the duration of revenue disruption is unknown and to
ensure the continued operation of our national government and to
provide services for our people, we will need to find other sources of
funding.
In doing so, I have already instructed the Ministry of Finance to
initiate contingency plans for revenue collection and allocation. This
will accelerate the increase in collections of non-oil revenues. It
also will prioritize the allocation of existing revenue, allowing us
to make the most of what we have. The Ministry of Finance will also
look into other options for replacing the lost revenue. On existing
cash reserves, rest assured that the government can operate for the
immediate future, depending on which cuts are made.
Your Excellences
The safety, security and health of our citizens remain our priorities.
Whatever austerity measures are required, we are confident that we can
continue to meet critical obligations for national security and public
welfare.
Meanwhile, we will continue to do everything possible to resolve the
impasse with Sudan and to restore the flow of South Sudan crude oil.
We remain in intensive discussions, in coordination with the African
Union and our allies, to arrive at an agreement that is fair to both
parties.
To date, however, the Sudanese government has refused to negotiate in
good faith. Given our history with the administration of President
Bashir, we realize that, unfortunately, we must prepare for a
disruption of revenue that could last many months. However, I want to
assure the people of South Sudan that all measures will be taken to
ensure that any disruption is minimal.
Your Excellences
This crisis comes at a period that we have internal challenges,
particular the recent tribal conflict in Jonglei State. It is our
collective responsibility to manage this situation with patience and
perseverance. This is a time when we as South Sudanese need to speak
with one collective voice and avoid inciting statements which will
further fuel the situation.
For this reason, I call upon this august house to support the decision
of the Council of Ministers to stop the flow of oil and search for
alternative sources of funding to manage government projects. I have
no doubt that this august house will seriously and critically consider
all available options and make the appropriate resolutions in the best
interest of the Republic of South Sudan immediately.
Together, as South Sudanese, we will endure this hardship. We are a
nation built on resilience, vigilance and pride. Through discipline
and focus, I am confident that our young nation will emerge stronger
and more united.
Thank you and God bless you all.
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