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Southern Sudan Considers Building Oil Pipeline

Feb. 16 (Bloomberg) -- Southern Sudan may build an oil pipeline to ease its dependence on routes through the north if new discoveries of crude are large enough, a leader of the region’s ruling party said.

When landlocked Southern Sudan becomes independent in July, “it will develop different alternative routes to access the seas,” Pagan Amum, secretary-general of the Sudan People’s Liberation Movement, told reporters today in Juba, the regional capital.

Southern Sudan will pay the north a transit fee for the use of a pipeline to Port Sudan on the Red Sea to carry oil exports when it becomes independent, Amum said yesterday. The region’s voters last month chose to secede from Sudan in a referendum that was a key part of a 2005 peace agreement that ended a 21-year civil war between the north and south in which 2 million people died.

At independence, Southern Sudan will assume control of about three-quarters of Sudan’s current oil production of 490,000 barrels a day, pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp.

Lamu Proposal

Garang Diing Akuong, Southern Sudan’s minister for energy and mining, said in November that regional authorities were in talks with Toyota East Africa to build an oil pipeline to a port in Lamu, Kenya.

There may be large oil discoveries in the southern states of Lakes and Jonglei, where Total SA has a concession, Amum said.

Paris-based Total SA owns 32.5 percent of a 118,000 square-kilometer (45,560 square-mile) concession in Jonglei and Lakes states. Total has said there is no set date to start drilling because of security concerns.

“The security on the field has to meet our standards,” Vinita Batra, a spokeswoman for Total, said Jan. 24 by phone from Paris. “It doesn’t yet. The context is still not completely stabilized in the south.”

Clashes between Southern Sudan’s army and forces led by renegade general George Athor last week in Jonglei killed 197 people, Amum said yesterday. Fighting also broke out this month in neighbouring Upper Nile state among units from the northern army stationed in the south.

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

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

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