2012

South Sudan plans to cut non-salary spending by 50 percent after its decision to halt oil
production, which accounts for 98 percent of the African country’s revenue, Finance Minister Kosti Manibe said.

South Sudan on Friday said it had withdrawn the $2.6bn offer it initially proposed as financial transitional assistance to Sudan in return for resolving the Abyei dispute, border issues and other outstanding issues between the two nations.

Countries expected to benefit from the construction of the Sh21.5 billion ($253million) Lamu-Southern Sudan-Ethiopia Transport (LAPSSET) Corridor will have to foot part of the budget, it has emerged.

The move stems from a dispute over Sudan's oil transit fees. South Sudanese say they are prepared for hardship, but outsiders warn it could mean another war.

South Sudan said it may regain the 2.6 million barrels of “stolen” oil because Sudan is unable to sell the crude after ordering companies to load the cargoes onto
four tankers last month.

South Sudan and Sudan did not reach an agreement on oil transit fees, border demarcation among others during the five day round table talks in the Ethiopian Capital Addis Ababa despite African Union High Level Implementation Panel (AUHIP) pressure on the two countries to end their disputes.

South Sudan said 2.4 million barrels of oil produced in December and January were confiscated by its northern neighbor, Sudan, amid a dispute over transportation fees that prompted the south to halt crude output.

The current round of talks between north and South Sudan on oil will likely be adjourned and resumed in two weeks time, an official in Khartoum said today.

South Sudan, reliant on oil for 98 percent of its revenues, in January took the drastic step of halting crude production, as a row with former civil war foe Sudan over transit fees hit a deadlock.

As Sudan and South Sudan meet for the latest round of negotiations featuring oil as a key issue this week, four ships loaded by Khartoum with southern crude are carrying their disputed cargoes to unknown buyers.