2011

A proposal by South Sudan to build an oil pipeline to Kenya and end dependence on North Sudan to export its crude has little prospect of becoming viable in the foreseeable future, because it requires fresh oil finds and an end to widespread violence.

China, a major player in the oil industries of South Sudan and Sudan, could use its influence to stop the escalating violence between the two countries that has seen the displacement of thousands of people and a reduction in oil production, a United States State Department official says.

An armed group belonging to Misseriya tribe opened fire on workers in a Chinese oil field in South Kordofan's Balila area on Wednesday, 28 September 2011.

The Sudanese president Omer Hassan al-Bashir issued a veiled threat to the newly established Republic of South Sudan (RoSS) that an agreement on oil transit fees must be reached by the end of October. In an interview with the London-based al-Sharq al-Awsat newspaper, Bashir stressed that the main purpose of the fees charged for transporting oil produced in RoSS is to shore up the budget shortfall in Sudan after the south’s secession.

The newly established state of South Sudan may soon see American oil companies operating there, a US official said.

South Sudan will pay in arrears for use of North Sudan’s oil facilities until the African Union (AU) manages to broker a deal over the issue between the ex-war foes, a southern official said.

There are indications that the governments of South Sudan and the Sudan will soon reach an agreement on a fee to be paid to the Sudan for transporting oil through its pipeline.

The government of the republic of South Sudan says it is reviewing contracts for oil operating companies to avoid future damages to people and the environment.

Contracts between China and South Sudan must be reviewed as the existing contract was signed when Sudan was still one country.

China is prepared to mediate between North and South Sudan in order to bridge difference in views regarding outstanding post-secession issues, the visiting Chinese Foreign Minister Yang Jiechi said.