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[Dehai-WN] (Reuters): Sudan sees no quick end to oil row with South

From: Berhane Habtemariam <Berhane.Habtemariam_at_gmx.de_at_dehai.org>
Date: Tue, 13 Mar 2012 16:13:08 +0100

Sudan sees no quick end to oil row with South

Mon Ma

By Ulf Laessing and Khalid Abdelaziz

KHARTOUM (Reuters) - A senior Sudanese official dashed hopes of a quick end
to a row with South Sudan over oil export fees, blaming Juba for blocking
chances of a deal that would relieve both countries' beleaguered economies.

State Oil Minister Ishaq Adam Gamaa insisted Sudan was under no pressure to
rush any deal because its economy could still survive without oil, a veiled
warning to Juba, which depends on oil revenues for 98 percent of its income.

The U.N. Security Council and the European Union last week urged both
countries to end their oil row which some Western diplomats fear could lead
to war as oil is the lifeline of both economies.

South Sudan split from Sudan in July under a 2005 peace deal that ended
decades of civil war, but both states are still wrangling over how much the
landlocked new nation should pay to export oil through northern pipelines.

In January, Juba shut down its entire output of about 350,000 barrels per
day (bpd) after Khartoum started taking some oil to compensate for what it
called unpaid transit fees.

The African Union is trying in a new round of talks in Addis Ababa to broker
a deal, but Gamaa accused Juba of blocking a compromise.

"They have insisted not even to talk about proposals by (the African
Union)," he told Reuters in an interview in the oil ministry on Sunday,
adding it was up to Juba to choose whether it wanted a deal or not. "The
decision is theirs," he said.

Gamaa said Khartoum was in a better position than Juba to weather the oil
shutdown because its larger economy had diversified revenue sources such as
gold and livestock exports.

"We came into the oil business only 10 years ago, so we have our system of
taxing. We have our system of agricultural products. We have our system of
livestock," he said.

In contrast, South Sudan looks vulnerable. Southern officials have said the
new nation has foreign exchange reserves to manage for up to a year, but
analysts have said the country may struggle after just a few months.

Gamaa countered southern statements that oil exports could resume quickly
after a deal, saying it would take at least one month to restart the
pipeline, which was now fully flushed with water to avoid gelling.

"If you want to start it, you have to fill it with 3 to 4 million barrels,"
he said in his office on the banks of the Nile.


Gamaa said Sudan was willing to look with "flexibility" at a compromise over
pipeline fees but that Juba's proposal to pay less than $1 a barrel would
lead to no compromise.

Khartoum has said it wants fees totalling about $36 a barrel, plus $1
billion in arrears from July.

Gamaa declined to give specific charges, but said a pipeline fee should not
be based on international norms such as mileage, as Juba had demanded, and
should take into account that Sudan owns the pipeline.

"Sudan owns the pipeline... It's not (a) typical (case)," he said.

Sudan has said it wants a wider deal with South Sudan which would also cover
sharing debt of almost $40 billion.

Both states also need to find a solution for the disputed border region of
Abyei, mark the poorly-demarcated border and end accusations they are
supporting rebels on each other's territories.

Gamaa declined to confirm that Khartoum had sold at least one shipment of
confiscated oil, saying only that the government had taken the amount of oil
it was entitled to as a transit fee.

He confirmed Sudan had diverted some southern oil to its two refineries, as
the South has said, but added the government was allowed to do so to keep
the pipeline running.

"It is flush oil. The South is trying to make an issue of it. This oil is
part of the pipeline," he said.

Sudan hopes to resume oil exports from next year, when production would hit
180,000 bpd from 115,000 bpd due to a better recovery rate and production
from new fields within existing blocks, he said.

"By the end of the year we will have 180,000 barrels," Gamaa said. Sudan
signed a technical agreement with Norway last month to boost the recovery
rate to around 45 percent from 23 percent.

C Thomson Reuters 2012 All rights reserved


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Received on Tue Mar 13 2012 - 11:13:29 EDT
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