South Sudan to pay Khartoum oil fees in arrears
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 on Friday.
North and South Sudan were evenly splitting proceeds of the 500,000 oil barrels the previously one country used to produce in line with a 2005’s peace deal between the two sides. South Sudan seceded in July taking with it nearly 75 percent of the country’s oil production.
However, disagreements lingered between the north and the South over the amount Juba will pay for the use of Khartoum’s pipeline infrastructure and refineries which the grossly under-developed South lacks.
Khartoum originally demanded $32 per barrel, a fee Juba termed as a “broad daylight robbery.” However, Khartoum later dropped the demand as talks over the issue under AU mediation in Ethiopia’s capital Addis Ababa proceeded with no reported success so far.
David Loro Gubek, undersecretary at South Sudan’s ministry of petroleum and mining, told Reuters on Friday that until the AU decides on the amount the South should pay, Juba will pay Khartoum in arrears, indicating the South’s willingness to accept any amount the AU decides.
"If the African Union decides that we have to pay this amount, I think we will pay it," he said. "Until then, the transport fees can be summed up and paid in arrears, according to the decision of the African Union. We have agreed they will handle it."
Gubek said that the fourth and final payment for oil liftings made in July arrived last week, but declined to say how much it was worth.
The U.S. Special Envoy to Sudan, Princeton Lyman, on Friday urged north and South Sudan to resume talks on oil within a week.
MOBILE REFINERIES
The southern official revealed that his country was considering construction of mobile refineries in order to tackle fuel and diesel shortages.
South Sudan president Salva Kiir on Friday blamed increased prices of fuel and other commodities on a blockade allegedly imposed by Khartoum on trade routes to the south.
Gubek said that South Sudan is engaged in talks with several companies to setup mobile refineries in order to produce enough gasoline and diesel to overcome the shortages.
"At the moment there are three companies that would take 3-5 months to set up. They said they could produce 10,000 barrels per day," he said said.
The southern official revealed oil exploration activities in South east of the newly independent country, renewing suggestions that Juba was considering to build a pipeline to Lamu on the coast of Kenya to transport its oil.
"There are certain blocks now where exploration is taking place. If oil is discovered there, unfortunately it will be too far to take the crude north," he said. "Eastern Equatoria (in the south east), if they find oil there, should we take it across to Sudan?"
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