Southern Sudan Backs Lifting of U.S. Sanctions on Sudanese Oil Industry

Southern Sudan’s government wants the U.S. to lift sanctions on Sudanese oil, said Riek Machar, the region’s vice president.

While U.S. economic sanctions imposed against Sudan in 1997 won’t apply to Southern Sudan after its independence on July 9, they will cover any parts of the southern economy, including oil, that benefit the north, the Treasury Department’s Office of Foreign Assets Control said in an April 12 statement.

“We have no other way to export the oil through South Sudan, it is only through the north,” Machar told reporters yesterday in Juba, Southern Sudan’s capital, after returning from a three-week trip to the U.S. “Therefore, if it continues to be sanctioned by the U.S., this is not going to affect the north alone, it is going to affect the south.”

Southern Sudan will assume control of about 75 percent of Sudan’s daily oil production of 490,000 barrels when it becomes independent. The crude, pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd and India’s Oil & Natural Gas Corp. day, is exported through a pipeline that runs to Port Sudan on the Red Sea.

Oil earnings accounted for about 98 percent of Southern Sudan’s 2010 budget.

The sanctions against Sudan will still prohibit U.S. citizens from “engaging in transactions relating to the petroleum or petrochemical industry in Sudan, and from participating in exports to or imports from the new state that transit through Sudan,” the Treasury Department said in the April statement.

To contact the reporter on this story: Matt Richmond in Juba at mrichmond10@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.

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