Sudan Says It Hasn’t Stopped South Sudan’s Oil Exports

Sudan’s government said it hasn’t blocked South Sudan’s oil exports, contradicting a statement by its oil minister two days ago that shipments have been halted.

“The government of Sudan has not and will not stop or impede the flow and export of oil of the Republic of South Sudan through its territory and facilities,” Sabir al-Hassan, a spokesman for Sudan’s delegation at talks with South Sudanese officials in Addis Ababa, Ethiopia, told reporters today.

Sudanese Oil Minister Ali Ahmed Osman on Nov. 28 announced a blockade on South Sudan’s oil exports that pass through its pipelines and said it would be lifted only when the two countries agreed on payments for the shipments. They failed to reach a deal in African Union-backed talks this week, al-Hassan said, and negotiations will resume next month.

While South Sudan took control of about three-quarters of the former unified Sudan’s output of 490,000 barrels a day when it seceded on July 9, it relies on the north for access to an export terminal on the Red Sea.

Sudan rejected an offer by South Sudan of $5.4 billion compensation package for the loss of its oil fields, the south’s chief negotiator, Pagan Amum, told reporters in Addis Ababa. Sudanese authorities responded to the offer with “hostility and threats,” he said.

Pipeline Fees

“South Sudan insist they have the right to continue exporting oil through our facilities without paying charges,” al-Hassan said. “If we do not find an agreement on fees and charges, we are under obligation to take our dues.”

He also criticized Sudan Sudan’s seizure on Nov. 8 of stakes held by Sudan’s state oil company, Sudapet, in joint operations in the south with companies such as China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp. (ONGC)

“Their assets that were more than $2 billion dollars were confiscated by a presidential decree issued by the president of the Republic of South Sudan,” al-Hassan said.

Amum said that Sudan has kept revenue owed to the south for oil exports from May to July. Since a 2005 peace agreement that ended a two-decade civil war until South Sudan’s independence, the north and south split earnings from crude pumped in southern fields.

“The claim that they need us to pay them processing and transportation fees is not true because we are paying those to the companies,” Amum said. “We are paying the Chinese. What the north is talking about is extortion.”

China yesterday urged the two sides to reach agreement in negotiations.

“Maintaining normal production of oil is important to both South Sudan and Sudan,” Chinese Foreign Ministry spokesman Hong Lei told reporters in Beijing. “We hope North and South Sudan can stay rational, show restraint, and resolve relevant problems through neighborly pragmatism and friendly talks.”

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

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

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