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Sudan Plans to Resume Oil Talks With South Sudan By Month-End

Sudan expects to resume talks with South Sudan by the end of this month to try to end a dispute over oil payments after failing to make a breakthrough at the latest round of discussions, a negotiator from the north said.

“They are far away from each other” on agreeing an what fees should be paid, Sabir Hassan, a consultant co-chairing the economic group of Sudan’s negotiating team, said in an interview today in Addis Ababa, the Ethiopian capital, where the latest round of negotiations on oil ended yesterday.

South Sudan completed a shutdown of crude production last month after accusing Sudan of diverting fuel to its refinery, forcing companies to load oil onto ships it controlled and blockading other shipments. Sudan said it confiscated crude to cover unpaid fees its owed for allowing the southern neighbour to transport oil via a pipeline to Port Sudan on the Red Sea.

South Sudan took control of about three-quarters of Sudan’s output of 490,000 barrels of oil a day when it gained independence from Sudan in July. The crude is pumped mainly by China National Petroleum Corp. (CNPZ), Malaysia’s Petroliam Nasional Bhd. and India’s ONGC Videsh Ltd.

South Sudan will attend the talks later this month to try to recover the “more than $600 million” worth of stolen crude, Pagan Amum, secretary-general of South Sudan’s ruling Sudan People’s Liberation Movement, said in a separate interview today in Addis Ababa.

“We will definitely talk about recovery of value of stolen oil by Khartoum,” he said. “That will be item number one.”

Payment Offers

Sayed el-Khatib, spokesman for Sudan’s negotiating team, said last month his government offered to accept payment of $6 per barrel in transit fees, while Amum said today that his government is prepared to offer 69 cents per barrel.

Sudan wants the south also to pay transport, processing and terminal costs, which South Sudan says it already pays to contractors. Sudan’s government decides on the fees it is paid, said Hassan, “not a foreign company.”

Including transportation costs, processing payments and the use of Sudan’s marine terminal, the north would be willing to receive $36 per barrel, Hassan said. The south is prepared to pay $7 per barrel, he said.

During the talks, the Juba-based government said it wants to continue exporting its oil through the north, according to Hassan. South Sudan signed memoranda of understanding with Djibouti and Kenya earlier this month to build new oil pipelines via those two countries as an alternative to the Sudanese route.

“There is no prospect of reaching an agreement on oil because the government of Sudan has taken a position, which is hostile, of stealing our oil,” Amum said. “There is no way the south can again venture to pump oil through Sudan.”

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

To contact the editor responsible for this story: Paul Richardson in Nairobi at pmrichardson@bloomberg.net.

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