23 February 2013

Sudan: Country Buys Gas, Oil From Kuwait - Expert

Khartoum — The Sudanese government has resorted to buying gas oil from Kuwait at a high premium to avoid possible damage to Khartoum refinery, an energy expert told Sudan Tribune.

The expert, who asked not to be named, said that the refinery's activity was negatively impacted by the secession of oil-rich South Sudan and instability of domestic oil production.

"The refinery must keep operating because stopping it means losing it once and for all," he said.

Local newspapers have quoted sources this week as saying that the Sudanese Petroleum Corporation has bought 520 tonnes of gas oil from Vitol Group and Independent Petroleum Group of Kuwait Ltd.

The sources said that Sudan had bought 8 shipments each one consists of 40,000 tonnes from Vitol Group and 5 shipments from Independent Petroleum Group of Kuwait Ltd that will be delivered from February to March.

Sudan bought the shipments at a premium of between $4.50-$5.more than market prices which comes at a time of projected shortage in supplies as a result of busy schedule for refinery maintenance during the second quarter of the year.

"The shipment will be delivered on a rush basis but the money will be paid [by Sudan] in the month of June which is why the Sudanese government accepted a sales prices which is $4 higher than Middle East price tag" the expert said.

The expert said that Khartoum is boosting its oil supplies to prevent fuel shortage and improve its negotiating position with South Sudan even if it means paying more.

"It is difficult for the government to find a solution to its economic and oil crisis without reaching a peace deal with South Sudan because the international community has become scarce toward Khartoum" he said.

South Sudan seceded from Sudan in 2011 under a deal that ended decades of civil war. A year ago, South Sudan shut down its entire oil output of 350,000 barrels per day after failing to agree on export and transit fees with Khartoum.

But both countries had agreed last September to set up a demilitarized buffer zone and resume oil production, but neither side has withdrawn its army from the 1,200-mile border.

Sudan insists that security arrangements are concluded before oil exports can resume.

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