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      • South Sudan says oil pipeline may shut down on Sudan blockade of shipments

South Sudan says oil pipeline may shut down on Sudan blockade of shipments

South Sudan said the operators of a

pipeline that carries its oil exports to Port Sudan have warned

the facility may be closed in two days unless a blockade being

imposed by neighboring Sudan on its shipments is lifted.

 

Sudan’s government would be “responsible for any damages

that will follow that shut down,” South Sudanese Oil Minister

Stephen Dhieu Dau told reporters today in Juba, the capital.

South Sudan on Jan. 10 accused Sudan of blocking 3.4

million barrels of its oil exports and said the northern

neighbour is also seeking to divert the flow of some of its

crude by building a new pipeline.

Sudan’s Foreign Ministry said it prevented the vessels from

leaving international waters in the Red Sea because they failed

to pay port fees. The new oil pipeline is for use in the future,

when the government plans to “buy or take over part of our dues

from the south in crude, after reaching a final oil agreement,”

it said on Jan. 11.

South Sudan assumed control of about three-quarters of

Sudan’s output of 490,000 barrels a day when it seceded on July

9 after an independence referendum. Talks since then have failed

to yield an agreement on the amount landlocked South Sudan will

pay to transport its oil through a pipeline across Sudan.

The two sides failed to reach an agreement on the oil

dispute in talks last month. Further African Union-sponsored

negotiations are scheduled to take place from Jan. 17 to Jan. 23

in Addis Ababa, the capital of Ethiopia.

 

Double Oil Output

 

Dau also said South Sudan plans to double oil production to

700,000 barrels per day in five years. For that increase to

happen, the country would need to build a new oil pipeline

because the current one doesn’t have sufficient capacity, he

said. South Sudan also doesn’t want to be dependent on Sudan for

its oil to be exported, Dau said.

“We must plan to diversify the routes,” he said. “You

should not put all your eggs in one basket.” South Sudan has

previously said it is exploring routes through Kenya and

Ethiopia.

South Sudan’s government earlier today signed exploration

and production-sharing agreements with six companies including

China National Petroleum Corp., Malaysia’s Petroliam Nasional

Bhd and India’s Oil & Natural Gas Corp. for six blocks in the

East African country. Foreign oil companies have been operating

without signed accords since South Sudan’s independence.

The state also plans to negotiate with companies that have

agreements for non-producing blocks signed with companies before

independence.

“We believe some of these companies have overstayed on

those blocks without doing anything and even the ownership of

these blocks is in question,” Dau said. “As a sovereign state we

will not abide by contracts signed by the Republic of Sudan.”

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