[Dehai-WN] (Reuters): 1. INTERVIEW-South sees no future in Sudan oil infrastructure-min 2 China urges north and south Sudan to keep oil flowing

From: Berhane Habtemariam <Berhane.Habtemariam_at_gmx.de_at_dehai.org>
Date: Tue, 29 Nov 2011 13:59:22 +0100

INTERVIEW-South sees no future in Sudan oil infrastructure-min

Tue Nov 29, 2011 12:12pm GMT

* Blasts decision by Sudan to halt south's oil shipments

* Offers Sudan $5.4 billion transitional financial package

By Hereward Holland

JUBA, Nov 29 (Reuters) - South Sudan will continue to press for a new oil
pipeline because it does not see a future in Sudan's oil infrastructure, the
oil minister said on Tuesday, a day after Sudan said it halted shipments of
the South Sudanese government's oil at port.

South Sudan took about three-quarters of the formerly united country's
roughly 500,000 barrels per day of output when it seceded, but must still
export its oil through pipelines running north to a Red Sea port in Sudan.

The two sides are still negotiating a raft of issues in Addis Ababa related
to the divorce of the two nations.

South Sudan's oil minister Stephen Dhieu Dau said Khartoum's decision to
halt shipments of oil sold by the government of South Sudan was
"unfortunate" and would negatively affect all of Sudan's oil interests.

"We do not see a future in the oil infrastructure of the north. Our oil must
have access to international markets. We should not be punished because we
decided to secede," Dhieu told Reuters by telephone from the Ethiopian

He said the new nation had offered Sudan a $5.4 billion transitional
financial package for the next five years to help plug a $7.8 billion fiscal
deficit caused by the split of the country in July, in line with a figure he
said was calculated by the International Monetary Fund.

"We have offered to pay $2.6 billion over five years and forgiveness of
arrears of $2.6 billion, for a deal in which we would not pay transit fees,"
he said.

"This is the package of financial assistance we are offering to Khartoum,
and while this is happening we were surprised by this unilateral decision
(to halt shipments of oil). This unilateral action taken by Khartoum will
have negative impact on all of Sudan's oil interests."

He said the alternative would be to pay a transit fee which would not be
more than $0.75 per barrel. (Writing by Alexander Dziadosz; editing by James

C Thomson Reuters 2011 All rights reserved


China urges north and south Sudan to keep oil flowing

Tue Nov 29, 2011 10:35am GMT

BEIJING Nov 29 (Reuters) - China, a major buyer of oil from Sudan and South
Sudan, urged the two governments on Tuesday to end a dispute over transit
fees that led Sudan to halt the landlocked South's oil exports.

Since southern Sudan seceded from its larger and long-dominant north in
July, China has sought to maintain good ties with both countries, despite
the rancour between them.

But Beijing's balancing act is being tested by Sudan's Monday announcement
that it had halted landlocked South Sudan's oil exports until the two sides
agree on a transit fee, stepping up a row between the former civil war foes
over how to untangle their once-integrated oil industries.

South Sudan seceded on July 9, taking about three-quarters of the formerly
united country's roughly 500,000 barrels per day (bpd) of oil production --
the lifeblood of both economies.

Most Sudanese oil is located in South Sudan, but exports to China and
elsewhere have to pass through pipelines and a seaport located in the north.

Chinese Foreign Ministry spokesman Hong Lei urged the two governments to
avoid choking off oil supplies.

"We believe that maintaining the normal production of oil is important for
both South Sudan and Sudan," Hong told a daily briefing.

"We hope that north and south Sudan will exercise reason and restraint, and
use a flexible and pragmatic approach to resolve their problems through
friendly consultation," he said.

"We are confident that the two governments will abide by their promises,
ensure the stability and continuity of oil cooperation, and protect the
lawful rights of Chinese businesses and the safety of their personnel."

By October, China's purchases of Sudanese crude appeared little affected,
with imports in the first 10 months of this year up 5.5 percent on the year
at 11.12 million tonnes, or about 5 percent of China's total crude oil

Khartoum decided to stop the government of South Sudan's oil exports --
roughly 200,000 bpd -- on Nov. 17, Ali Ahmed Osman, Sudan's acting oil
minister, told reporters on Monday.

But he added that the pipeline was still running and international firms
would not be affected.

Sudan had been allowing South Sudan to continue exporting crude without a
final agreement in expectations the fees would be paid after a deal.

Osman said South Sudan already owed Sudan some $727 million in arrears for
the period between July 9 and the end of October.

Sudan had blocked a shipment of South Sudan's oil in August, and said it was
asking for a transit fee of $32 per barrel. South Sudan rejects the figure
as too high.

Before South Sudan seceded, the two governments split revenues from southern
oil roughly 50-50.

In August, China's visiting Foreign Minister Yang Jiechi vowed that Beijing
would support both Sudan and South Sudan and help both countries develop
their oil industries.

China maintained close economic and political ties with north Sudan
throughout a U.S. trade embargo and also wants to reach out to the south,
which decided to break away from Khartoum under a 2005 peace deal.
(Reporting by Chris Buckley)

C Thomson Reuters 2011 All rights reserved


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