Monday December 11, 2017

South Sudan orders the shutdown of oil production amid a deepening row with Khartoum over pipeline fees

Bith Jonathan


JUBA – Speaking to the reporters on Friday in Juba, the Minister of Information Barnaba Marial Benjamin said, “The government has instructed the minister of petroleum and mining to proceed with arrangements for a complete shutdown of oil production.”

“The council of ministers decided today that in light of the present quantities of oil being taken by Khartoum” it would halt production, he continued.
South Sudan produces roughly 75% of total oil reserves found in the whole of Sudan. However even as south Sudan splits, both countries are still locked in an equal sharing deal of oil revenues

According to the Reuters, the landlocked new African nation needs to use a northern pipeline and port to export the crude but has failed to reach an agreement with Khartoum over a transit fee which the Khartoum demanded $36.00 per barrel.

There has been a bitterness accusation between Khartoum and Juba government. Juba government accused Khartoum government of looting South Sudan’s oil while the Khartoum government strongly fire back by accusing Kiir’s government of failing to pay $36 per barrel as well the Bashir government is demanding $1 billion dollars for unpaid transit fees. Khartoum also wants Juba to share Sudan’s external debt of $38 billion.

Sudan’s government is under pressure to overcome a severe economic crisis after losing the southern oil, which made up 90 percent of the country’s exports. It generated $5 billion in oil revenues in 2010.
South Sudan pumps around 350,000 bpd, officials have said. Sudan produces 115,000 bpd in its remaining fields but needs it for domestic consumption.

However, Dr. Benjamin cautious the reporters saying that, “the shutdown of production would not be immediate, and that South Sudanese President Salva Kiir would meet with Sudanese President Omar al-Bashir before it was stopped.”

“It is not just closed like a door-key…. it cannot be less than seven days,” he said of the planned shutdown. “The council has also agreed that President Kiir will meet Omar al-Bashir at the African Union in Addis Ababa on Jan 27, 2012.”

Oil companies in South Sudan include Nile Petroleum Corporation owned by the Juba government, and Petrodar Operating Company, which is owned mainly by China National Petroleum Corporation (CNPC), Petronas of Malaysia, Sudapet of Sudan and SINOPEC of China.

China, which relies on South Sudan for nearly five percent of its oil, is supporting negotiations between the two sides in the Addis Ababa, Ethiopia.


Bith Jonathan

Bith Jonathan is an award-winning journalist and columnist. He holds a bachelor’s degree in mass media and journalism from the prestigious kenyan school of mass media.

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