South Sudan Expects $540 Million Once Sudan Oil Deal Is Signed

South Sudan expects to receive $540 million held in foreign bank accounts once an oil agreement is signed with neighboring Sudan, Finance Minister Kosti Manibe said.

The money is being held in the accounts because of a dispute with Sudan over the ownership of some crude shipments made before South Sudan shut down its oil production in January because of a dispute over transit fees, he told reporters today in Juba, the capital. South Sudan expects the two countries will sign an agreement on Sept. 23 in talks mediated by the African Union in Addis Ababa, Ethiopia’s capital, he said.

South Sudan, which gained independence in July 2011, is seeking loans to finance its budget deficit caused by the loss of oil, which provided about 98 percent of government revenue. The country may ask the International Monetary Fund for a $200 million credit, Manibe said.

“We are seeking loans from very many quarters including the IMF,” he said. “Our preference is to get concessional loans.”

At independence, South Sudan took control of about three-quarters of the formerly united Sudan’s output of 490,000 barrels of oil a day. The crude is mainly pumped by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s ONGC Videsh Ltd.

The government has also been seeking loans tied to building power, road, rail and port projects, Manibe said.

“We are working on plans to have thermal power plants built in oil-producing areas,” he said. “In the beginning they might be linked with the mini-refinery projects we intend to build there and the excess power will be sold to consumers.”

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