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[Dehai-WN] (Reuters): 1. Sudan,S.Sudan to hold postponed summit-AU 2. FACTBOX-Sudan and South Sudan oil payment dispute

From: Berhane Habtemariam <Berhane.Habtemariam_at_gmx.de_at_dehai.org>
Date: Sat, 7 Apr 2012 18:56:12 +0200

Sudan,S.Sudan to hold postponed summit-AU

Fri Apr 6, 2012 11:46pm GMT

* Sudan's president will meet South Sudan counterpart

* AU mediator Mbeki says date to be decided later

KHARTOUM, April 7 (Reuters) - Sudan's President Omar Hassan al-Bashir will
meet his South Sudanese counterpart, Salva Kiir, to defuse tensions between
the neighbours after an initial summit was postponed, an African Union
mediator said on Friday.

South Sudan became independent in July under a 2005 peace agreement that
ended decades of civil war with Khartoum but both sides are at loggerheads
over oil payments and a long list of other issues.

Bashir cancelled a meeting with Kiir planned for Tuesday after border
fighting between the two neighbours' armies broke out last week, the worst
violence since southern secession.

The African Union managed to bring both sides back to the negotiation table
this week but talks were adjourned on Wednesday with no progress in sight.

"President Bashir confirmed that the summit between him and President Salva
Kiir takes place after necessary preparation," former South African
President Thabo Mbeki, an AU mediator, told reporters after meeting Bashir
in Khartoum. He had earlier met Kiir in Juba.

"When and where will be decided after the preparation committee finishes its
job," he said.

Mbeki also said Bashir had assured him that hundreds of thousands of South
Sudanese living for decades in Sudan would have nothing to fear when their
residency runs out on Sunday.

Sudan allowed South Sudanese living in the north until April 8 to stay
without valid residency papers as part of a transition since southern

Bashir and Kiir were meant to finalise two agreements to allowing citizens
of both countries to live and travel in the north and south without permits.

"President Bashir said that there is no reason for southerners to fear
negative repercussions," Mbeki said.

Up to 700,000 South Sudanese live in Sudan, many of which arrived in the
eighties to escape civil war in the south.

Among other unresolved issues, Sudan and South Sudan need to mark their
border and end accusations of supporting rebels in the other's territory.
(Reporting by Khalid Abdelaziz; Writing by Ulf Laessing; Editing by Doina

C Thomson Reuters 2012 All rights reserved


FACTBOX-Sudan and South Sudan oil payment dispute

Fri Apr 6, 2012 6:47pm GMT

April 6 (Reuters) - Sudan and South Sudan have been locked in a dispute over
oil exports since the South seceded in July.

The row pushed the new nation to shut off 350,000 barrels per day of crude
output in January and has threatened both economies.

In March relations between the former civil war foes appeared to be
improving, with both sides committing to sign a deal on citizenship and on
defining their mutual border.

In the last fortnight violent, however, clashes in the oil-rich border
territories between the rival armies has d ashed ho pe of a swift resolution
to the impasse and sparked international concern of a return to full-blown

Here are some key facts about the row and its implications:


South Sudan inherited about three quarters of Sudan's oil output when it
declared independence - giving it about 350,000 barrels per day (bpd),
compared with Sudan's roughly 115,000 bpd.

The catch is that landlocked South Sudan must pipe the crude through its
northern neighbour to the Red Sea terminal at Port Sudan to export it. The
two have failed to agree how much Juba should pay to do this.

Both rely heavily on oil - it contributed some 98 percent of state revenues
in South Sudan and over half in Sudan before the split - and so both are
under pressure to get a good deal.

Further complicating the issue, almost all the oil in both countries comes
from fields near the disputed border. Rebels are fighting government troops
on both sides of the boundary, and the two nations accuse one another of
backing the insurgencies.

The dispute boiled over in January, when South Sudan shut down its entire
output in protest after Sudan began confiscating some oil from the south.

South Sudan accuses Khartoum of "stealing" its oil, while Sudan says it is
entitled to a share because Juba has refused to pay fees since it seceded,
fuelling inflation and a foreign currency shortage in Sudan.

South Sudan says Sudanese fighter planes bombed an oil well-head in Unity
February, although there was minimal damage because the well was not in use.

Apart from oil, both neighbours also need to mark their joint border, find a
solution for the disputed region of Abyei and end regular accusations of
supporting rebels on each other's territory.


The most prominent oil firms operating in the two countries are Chinese,
Malaysian and Indian. A long history of conflict and U.S. trade sanctions
against Sudan have deterred most Western investors.

Petrodar, whose major shareholders are the state-owned China National
Petroleum Company (CNPC) and Malaysia's Petronas, was pumping much of South
Sudan's oil before the shutdown. It is active in South Sudan's Upper Nile

The Greater Nile Petroleum Operating Company (GNPOC), which operates blocks
in South Sudan's Unity state, pumped most of the remainder. CNPC also leads
this consortium, along with Petronas and India's ONGC Videsh.

The other consortium operating in South Sudan is the White Nile Petroleum
Operating Company, set up as a 50/50 joint operating company between
Petronas and Sudan's state-owned Sudapet, according to the consortium's

Other firms include France's Total SA, which has a roughly 120,000-square-km
concession - about the size of nearby Eritrea - mainly in South Sudan's
Jonglei state. The firm stopped exploration in 1985 after the civil war
between north and south escalated, but says it will start again soon.

Unipec, the trading arm of China's top refiner Sinopec Corp, bought most of
South Sudan's oil before the shutdown - a South Sudanese official said in
November the Chinese firm was purchasing more than 80 percent of the
country's oil. China bought some 12.99 million barrels from both countries
last year, amounting to five percent of the Asian country's crude imports.

Sudan's output since July has served only domestic consumption.


Sudan has confiscated over 6 million barrels of southern crude since
December, according to figures provided by South Sudan's negotiating team in
Addis Ababa. Sudanese officials have not publicly confirmed or denied this

This included 1.2 million barrels taken in December, four shipments totaling
roughly 2.5 million barrels in January and another 2.4 million barrels
reported in February, according to the figures provided to Reuters.

The documents showed the four shipments included 605,784 barrels of Dar
Blend loaded onto the Sea Sky, 618,712 barrels of Dar Blend loaded onto the
Al Nouf, 629,368 barrels of Nile Blend on the Ratna Shradha and 600,121
barrels of Nile Blend loaded on the ETC ISIS.

It is unclear if the remaining barrels were intended for domestic
consumption in Sudan or for export.

Swiss-based commodities trader Trafigura bought at least one of these
shipments - the cargo loaded on the Ratna Shradha - industry sources have
said. The fate of the other shipments is unclear, but Middle East-based
trader FAL Oil was managing two of the tankers.

South Sudanese officials have also accused Khartoum of building a "tie-in"
pipeline to divert some 120,000 barrels per day of southern production to
Sudan's Khartoum refinery.

Sudan says it has diverted some oil to refineries but insists it is entitled
to it.


One of the central disagreements revolves around how much landlocked South
Sudan should pay in transit fees, as well as the cost of using the two
pipelines, processing facilities and the Red Sea marine terminal near Port

South Sudan points to oil company documents that show it has been paying
transportation, processing and marine terminal fees directly to the oil
companies since the split.

Khartoum says those fees need to be renegotiated because the infrastructure
lies within its territory and that South Sudan is not a signatory to crude
oil production and transportation agreements signed by the Sudanese
government and operating companies before partition.

Both sides cite international norms to back up their positions, in
particular the 900-km Chad-Cameroon pipeline.

Based on the 45-cent per barrel transit Chad pays Cameroon, Juba is
currently offering to pay 63 to 69 cents per barrel, adjusting for the
length of the 1,370-km eastern Petrodar pipeline and 1,650-km GNPOC

But Khartoum argues that the Chad-Cameroon deal was struck when crude oil
cost $15 per barrel. Sudan has asked for $6 per barrel, corrected for an
average oil price of $110 per barrel.

Sudan also wants $18.50 per barrel for the use of the pipelines
(transportation fee), $6.50 per barrel for the use of the marine terminal
and $5 per barrel for the use of processing facilities, bringing the total
to $36 per barrel.

South Sudan says it is already paying all of those fees on a commercial
basis to GNPOC ($7.40 per barrel) and Petrodar ($5.50 per barrel),
consortiums who own and operate the pipelines, according to interim

The eastern pipeline is wholly owned by Petrodar, while Khartoum owns a 70
percent stake in the GNPOC pipeline with the remainder owned by the
consortium partners.

However, the Sudan government argues that it has ultimate title of the oil
facilities within its territory and therefore has the right to levy charges
of its choice on third-party users like South Sudan.


Sudan wants financial help to overcome a fiscal gap of $7.8 billion and a
balance of payment gap of $15.99 billion between 2011 and 2015, according to
the International Monetary Fund.

The African Union, which is mediating talks in Addis Ababa, proposed has
proposed a transit fee of $3 per barrel, adjusted for inflation.

It suggests Juba pay Khartoum $2.7 billion to $5.4 billion over four years
to help plug Sudan's fiscal deficit, with unnamed members of the
international community and the Sudanese government covering the remainder
of the gap.

The AU also advised the South to sell Sudan 35,000 barrels per day of Nile
Blend at market prices.

Khartoum accepted the proposals, linking it to a $5.4 billion direct cash
transfer from Juba and the return of Khartoum's participating interest and
assets of Sudapet, Sudan's state oil company.

At partition the two governments agreed to divide oil resources according to
the territory they fell within. But Khartoum argues Sudapet is a financial
asset that should be retained by Sudan and believes its shares in the
consortiums operating in the South should not have been taken by Juba in
late 2011.

Juba accepted the AU proposals by offering a tranche of $2.6 billion over
three years but only if Sudan repays the seized oil, shoulders shippers'
demurrage costs, and backs down on transportation and processing fees.

Previously, Juba has also offered to forgive Khartoum $2.8 billion of what
is describes as a total of $5.8 billion in arrears related to oil and the
division of the country.

A recent surge of goodwill between the two countries saw Juba's top
negotiator Pagan Amum announce hopes of a comprehensive deal on oil and
other issues within a month or two but recent violence is likely to set back
that schedule.

(Compiled by Alexander Dziadosz and Hereward Holland; Editing by Lisa

C Thomson Reuters 2012 All rights reserved


S.Sudanese face uncertain future in north next week

Fri Apr 6, 2012 11:35am GMT

* Up to 700,000 South Sudanese live in Sudan

* They face uncertain future from Sunday

* Border fighting hampers return of South Sudanese

By Ulf Laessing and Khalid Abdelaziz

KHARTOUM, April 6 (Reuters) - Osman may find himself in legal limbo on
Sunday when he and hundreds of thousands of other southerners lose their
residency rights in Sudan, nine months after their homeland seceded.

A notional homeland in Osman's case.

"I am a victim of southern secession. I was born and raised in the north,
have never been to the south and my wife is from the north," said Osman, who
speaks Arabic like most Sudanese, not English or any of the tribal languages
common in the south.

"I want to stay in Sudan but the government does not allow it," said the
35-year-old engineer, declining to give his family name for fear of trouble
with the authorities.

He is unable to get a Sudanese identity card as his father is from the
south, but also cannot get a South Sudan passport since Juba has not yet
opened a functioning embassy in Khartoum.

"I am kind of stateless," Osman complained.

Worse still, he risks separation from his wife and children when a
transition period for southerners to live and work in Sudan without permits
expires on April 8.

South Sudan became independent in July under a 2005 peace deal that ended
decades of civil war. Khartoum has ruled out dual citizenship for myriad
southerners who have lived in the north for decades, many of them after
fleeing the fighting.

Sudan and South Sudan remain at loggerheads over many secession-related
disputes. Border fighting last week prompted global powers to warn a return
to full-blown war was possible.

Sudanese President Omar Hassan al-Bashir had been due to meet his southern
counterpart Salva Kiir on April 3, but called off the summit after the
clashes. They were to have signed two agreements, on residency and on free
movement of citizens of both nations, which would let southerners to stay in
the north.

"There is uncertainty," said Jill Helke, head of the Sudan mission of the
International Organization for Migration, which is helping tens of thousands
of people to move to the south.

"It is unclear what will happen. It can go very smoothly with Sudan being
practical and just extending the transition period, giving a grace period or
showing flexibility. (But) if there are political problems it can be

State news agency SUNA said in January, before an initial agreement to grant
residency was reached in March, that southerners would be treated as
foreigners from April 8.

But Juba, overwhelmed with the task of building a state from scratch, has
failed to open an embassy in Khartoum that can issue the passports needed to
apply for residency permits.

More than 370,000 southerners, who are mostly Christians or animists, have
gone home since October 2010. Tens of thousands more are now packing up,
feeling they no longer have a future in the mainly Muslim north.

Bashir has said Sudan will adopt an Islamic constitution, while other
officials have said the country needs to cut down on foreign workers to
create jobs to fight an economic crisis.

"I don't want to stay in the north," said 56-year-old Michael, who used to
work for Sudan's government until he was fired along with tens of thousands
other southerners in July.

"I am still here because I haven't been paid my severance yet. I don't know
how to solve this problem."


The unclear legal status for South Sudanese in the north is just one of many
unresolved issues between the former foes.

Oil, the lifeline of both countries, is another.

They are arguing over how much the South should pay to export crude through
Sudan, prompting Juba to halt its entire output to stop Khartoum seizing oil
in lieu of "unpaid fees".

They also need to mark their 1,800 km (1,200 mile) border and find a
security arrangement for the frontier regions, where both accuse the other
of supporting rebels in their territory.

The African Union managed to bring both sides to the negotiating table this
week after the border fighting, but talks were adjourned on Wednesday with
no progress.

Even some Sudanese officials admit they do not know what will happen to
southerners living in Sudan after Sunday.

"They say they will be foreigners," said al-Sair al-Umda, head of Sudan's
official internally displaced person (IDP) center, citing local media
reports about the South Sudanese.

"But we haven't been issued any papers yet (to treat them as foreigners). We
will go ahead with our plan. We will give anybody who wants to go south his
proper documents."

Estimates of the number of southerners living in Sudan range from 300,000 to
700,000. Many live in slums on the outskirts of Khartoum where they arrived
in the 1980s to escape civil war.

"It is very difficult to say who is a southerner. Many don't have documents
or have never been to the south," Helke said.

Some southerners have even returned after failing to find work in South
Sudan, one of the world's least developed nations.

"I went to my country after independence to the city of Wau but came back,"
said 24-year-old car-washer Charlino. "I want to stay here because I won't
find work there."

Tens of thousands of southerners waiting to go home since independence have
been held up because South Sudan was unable fund their transport by Nile
barge, bus or train.

Border fighting has also made land travel harder.

A convoy with up to 1,700 returnees was caught up in last week's violence.
Half the buses and trucks pushed on over the border while the rest came
back, a U.N. report said on Monday.

Around 11,000 people are stuck at the Sudanese Nile port of Kosti where they
wait for barges that have yet to materialise.

In February, Sudan stopped Nile transports after accusing Juba of loading
weapons on barges on the return trips to supply rebels in Sudan's border
land. Juba denies the charges.

"We want both countries to find a solution for our situation," said Osman.
(Editing by Alistair Lyon)

C Thomson Reuters 2012 All rights reserved


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