Despite strife, South Sudan oil flows

crude oil barrels

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The flow of oil from South Sudan through northern pipelines has been unaffected by a week of fighting on southern soil, Juba’s ambassador to Khartoum said on Sunday.

“Nothing happened to the oil,” Ambassador Mayen Dut Wol told AFP on the sidelines of a news conference.

“So oil is flowing and up to this morning I was talking with the minister of petroleum and oil in Southern Sudan and he told me that nothing has happened to petroleum facilities.”

Oil is “flowing peacefully”, the ambassador said, as envoys from the United States and Nigeria prepared to fly into the South as part of efforts to avert all-out civil war.

crude oil barrels
crude oil barrels

Petroleum companies have started pulling staff out of South Sudan’s oil-rich Unity state, which borders Sudan, after several local oil workers were singled out on ethnic grounds and killed last week.

There has also been fighting in and around Bentiu, the capital of Unity state where Chinese and Malaysian firms are among those operating in the oilfields.

On Saturday, a key army commander in control of Unity state defected to join the rebel forces of Riek Machar, the fugitive former vice president.

However, army spokesman Philip Aguer insists that troops loyal to President Salva Kiir remain in control of the area.

Oil production forms more than 95 percent of South Sudan’s fledgling economy.

Fees paid by South Sudan to send its oil for export through northern pipelines are also a significant revenue-earner for cash-strapped Sudan.

On Friday, Information Minister Ahmed Bilal Osman expressed concern that the South’s oilfields will become victims of the fighting between the two opposing factions.

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“Definitely one of the targets of the two powers, will (be to) try to take over the oilfields,” perhaps as a way to improve their bargaining position, he told AFP.

“It’s a struggle for wealth and power.”

Sudan is to receive an estimated $1.5 billion in fees from South Sudan next year for moving its crude through Sudanese infrastructure to the Red Sea shipping terminal.

The South became independent less than three years ago under a 2005 peace deal that ended 23 years of civil war.

It separated with roughly 75 percent of the 470,000 barrels per day of crude produced by the formerly unified country, while refineries and export pipelines stayed under Khartoum’s jurisdiction.

On Saturday, a senior oil ministry official in Khartoum said all the South Sudanese oil passing through Sudan’s infrastructure is sold abroad.

“We don’t take from them any oil,” Hisham Taj Elsir said, adding Sudan’s own production of about 130,000 barrels per day provides more than enough for domestic petrol consumption.

“We have a surplus,” he said.

Diesel, however, is supplemented by imports and another ship arrived with more of the fuel on Saturday, he said.

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