14 November 2012

South Sudan: Kiir Says Oil Production to Resume Next Week As Khartoum Asserts Security Prerequisite

Photo: UNEP
Oil rig (file photo): The country will only pump oil at about 70 percent of its former capacity.

Khartoum — The president of South Sudan Salva Kiir declared that his country's oil production will be restarted next week after nearly a year of suspending it over a dispute with Khartoum on fees that should assessed for exporting the crude through the north's pipelines.

Kiir made the announcement during a meeting he held today in Juba with visiting Kenyan deputy Prime Minister Uhuru Kenyatta.

"It is after the successful completion of negotiations with the Sudan [that we] will re-launch the transporting oil [pipeline] next week" he said.

Last September, the two countries reached an agreement on the oil driven mainly by the economic difficulties they faced that were compounded by the oil shutdown whuch denied them billions of dollars in revenues.

Under the final deal, South Sudan will pay between $9.10 and $11 a barrel to export its crude through the north. Juba will also pay $3.08 billion to help Sudan overcome the loss of three quarters of oil production due to southern secession.

South Sudan's pre-shutdown oil production was approximately 350,000 barrels per day (bpd).

In Khartoum the Sudanese oil minister Awad al-Jaz told South Sudan's oil Undersecretary Machar Aciek Ader Nyang that implementing the oil accord is contingent upon finalizing a deal on security arrangements.

He underscored the importance of security to provide conducive environment for oil production. The two sides discussed technical details for restarting oil flow in a closed session.

Nyang told reporters upon arriving in Khartoum that South Sudan oil will reach global markets by year end and stressed the importance of cooperation between the two countries on areas related to oil.

The Secretary General of the Ministry of Oil Awad Abdel Fattah on his end told reporters that South Sudan oil will arrive at Port Sudan terminals within two months if a deal on security arrangements agreement is reached.

The statements by Sudanese cast doubts over whether Khartoum will allow oil flow to resume in the event that security deal remain elusive. Sudan accuses its southern neighbor of backing rebels fighting its army in border states of Blue Nile and South Kordofan. Juba however denies these allegations.

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